Philippine stocks eased on Monday, led by top mall developer SM Prime Holdings Inc, on concerns a weak peso and rising interest rates will hurt companies, analysts said.
The peso matched its record low of 56.35 per dollar during morning trade, while interest rates jumped at a bill auction on uncertainty over who will win the presidential election on May 10.
"Investors are cautious of the weak peso and expectations of rising interest rates," said First Grade Holdings Managing Director Astro del Castillo.
"At the start of the year, investors were bullish on prospects of Philippine business. But with the peso at a record low and higher interest rates, they are now more careful and are re-assessing their strategies."
The main index ended 2.89 points or 0.2 percent lower at 1,468.76, cutting its gain for the year so far to 1.83 percent.
SM Prime, which operates seventeen shopping malls across the nation, fell 1.67 percent or 10 centavos to 5.90 pesos. Pilipino Telephone Corp (Piltel), the country's third-largest mobile phone firm, dropped 2.35 percent or four centavos to 1.66 pesos.
Market turnover rose to 617.49 million pesos ($11 million) from Friday's 400.27 million pesos.
Losers beat gainers 24 to 21, with 38 stocks unchanged.
Yields at a Treasury auction of 42-day T-bills jumped to 7.312 percent, up from an average of 6.435 percent at an auction of 91-day bills on February 16 on the political worries and ailing peso.
By the midday break, the peso was quoted at 56.315/33 per dollar compared with Friday's close of 56.345. A weaker peso increases companies' costs for servicing their dollar debt.
Del Castillo expects the market to drift within a 1,450 to 1,480 range this week. "The market will just consolidate as investors look for reasons to participate in the market," he said.
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