Peso, stocks fall on euro debt fears, US jobs data

WEAK US jobs data and fresh fears that Europe’s debt crisis is spreading across the continent pulled down the peso and Philippine share prices on Monday.

At the Philippine Dealing System, the peso shed more than 50 centavos to close at 46.835 to the US dollar from last Friday’s 46.30 finish.

The greenback opened at P46.49 and moved to a high of P46.85 and a low of P46.49, with total trading volume reaching $971.67 million, up from Friday’s $829.41 million.

A trader said the market was surprised with Hungarian officials’ statement last week that the nation was at risk of a Greek-style fiscal crisis.

“The comment shocked investors which resulted in renewed risk aversion,” the trader said.

The trader said the peso will continue to move downward in the coming weeks since the market is very cautious about the development in Europe.

The dollar is expected to trade between the P46.50 and P47.10 range within the week.

At the Philippine Stock Exchange, share prices sharply fell along with other Asian markets on Monday, taking their cue from the steep drop in Wall Street following a weaker-than-expected US employment report.

The local composite index shed 2.71 percent, or 90.94 points to 3,266.11 while the broader all-shares index fell 1.97 percent, or 41.7 points to 2,082.16.

Market breadth was bearish as losers beat gainers, 95 to 14, while 51 stocks were unchanged. Volume was weak with a total of 749.69 million stocks worth P3.05 billion changing hands.

“We would have wanted to see some good news over the weekend to give investors a motivation to come back to the market, but there was no big development that could have prevented the sell off,” said Jun Calaycay of Accord Capital.

The analyst said investors were still jittery and too sensitive to negative developments so they could not ignore the slump in Wall Street despite good underlying economic fundamentals.

The disappointing US jobs report shocked investors who have grown more confident in the economy in the previous days, pulling down the Dow Jones industrial average to 9,931.97 after plummeting 3.15 percent, or 323.31 points.

Also dragging down the overseas markets were renewed concerns over the European debt crisis, which could be seen spreading to Hungary after the government warned that the country might have to default on its debt.

“After breaking into new highs, the PSEi has whipsawed back below the important 3,335 resistance level. It wasn’t exactly surprising considering that the breakout last week lacked conviction. Moreover, volatility has been so high that it would be easy for the index to swing back and forth,” said AB Capital. –Lailany P. Gomez and Krista Angela M. Montealegre, Manila Times