THE peso hit a new 17-month low while the stock market dropped back to the 6,400 level on Friday as reported explosions in Iran fanned concerns about an escalation of the Middle East crisis.

The currency weakened by 46 centavos to P57.65 against the dollar, its worst close since Nov. 10, 2022's P29.19:$1 and extending a losing streak to seven days.

The benchmark Philippine stock exchange index (PSEi), meanwhile, snapped a two-day rise by shedding 80.19 points, or 1.23 percent, to end the day at 6,443. The broader All Shares index also closed in the red, losing 34.77 points, or 1.01 percent, at 3,421.55.

The peso opened trading at P57.35:$1 and ranged from P57.32 to P57.655. Volume reached P1.847 billion, up from P1.798 billion in the previous session.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the peso declined as investors sought safety in the dollar due to heightened risk aversion.

Claire Alviar, research associate at Philstocks Financial Inc., also said that the PSEi declined as tensions between Israel and Iran escalated, which led to investors selling some shares ahead of the weekend "to avoid any uncertainties."

Regina Capital Development Corp. Managing Director Luis Limlingan, meanwhile, said Friday's drop was also due to "tempered expectations" for interest rate cuts.

"Economists and strategists [are] increasingly entertaining the possibility of no reductions at all this year," he noted.

Market participation was weak, resulting in a net market value turnover of P4.83 billion.

The mining and oil index was the sole gainer as it advanced by 1.15 percent, while property dropped the most by 2.55 percent.

Decliners overwhelmed advancers, 134 to 58, while 43 were unchanged.

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