Peso back at 54 pesos: $1; PSEI not working again

On Monday, the peso closed stronger, returning to 54 pesos:$1, but the stock market fell again as investors digested the possible impact of the collapse of US banks.

The currency gained 24 cents to close at 54.93 pounds against the dollar, while the underlying Philippine Stock Exchange Index (PSEi) shed 45.43 points, or 0.69 percent, to close at 6544.45.

The broader All Shares index fell 21.56 points, or 0.61 percent, to 3,518.83.

Rizal Commercial Banking Corp. Chief Economist Michael Ricafort said the PSE has fallen “as a result of recent US bank failures.”

The Silicon Valley Bank (SVB), which specializes in lending to the technology sector, was shut down by regulators last Friday following a run on banks.

The collapse of SVB, the largest in nearly 15 years, followed on Sunday when Signature Bank, which is involved in the cryptocurrency business, was also taken over by the Federal Deposit Insurance Corporation.

The failure of the SVB is blamed on the bank’s failure to accommodate the Federal Reserve’s rate hike. Filstox Finance Inc. Claire Alviar, a research fellow, said investors will now be waiting for the outcome of the Fed’s policy meeting next week.

Some analysts say the US central bank may pause further tightening due to financial turmoil, although that could also be affected by February inflation data due Tuesday US time.

The peso opened at 55.05 pesos: $1 and fluctuated between 54.79 and 55.08 pesos. The volume reached $1.074 trillion compared to $779 million in the previous session.

On the stock market, only holdings, mining and oil closed in positive territory, adding 0.44% and 0.01% respectively. Financial fell the most at 2.02 percent.

A total of 913.52 million shares worth 25.53 billion pesos changed hands.

There were more declines than gains, from 124 to 58, while 47 remained unchanged.