PSE index sinks to 5,800 range on oil, peso woes

PHILIPPINE SHARES slid further on Tuesday as elevated oil prices and a weak peso continued to cloud market sentiment.

The Philippine Stock Exchange index (PSEi) dropped by 0.75% or 44.72 points to close at 5,896.80, while the broader all shares index fell by 0.19% or 6.58 points to end at 3,347.55.

This was the PSEi’s worst finish in over two weeks or since it closed at 5,833.64 on April 30.

“Elevated global oil prices, with Brent crude testing the $110-per-barrel level, and the peso’s weak position, testing record lows, weighed on the local bourse,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

“The local bourse ended below 5,900 level as trading activity remained thin amid persistent uncertainty over economic conditions, elevated oil prices, and the maintained depreciation of the local currency. Investor sentiment stayed cautious, with market participants largely adopting a wait-and-see stance due to concerns over inflationary pressures and their impact on the broader economy,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message. “As a result, subdued participation kept overall market volume muted throughout the session.”

Oil prices fell on Tuesday, with global benchmark Brent crude dropping 1.5%, after US President Donald J. Trump said he had paused a planned attack on Iran to allow for negotiations to end the war in the Middle East, Reuters reported.

Mr. Trump posted on social media on Monday that he was holding off a military attack on Iran scheduled for Tuesday while efforts to reach a deal continued, adding that the US was ready to resume attacking if a deal is not reached.

Brent futures for July were down $1.73 or 1.5% at $110.37 a barrel at 0825 GMT, while US West Texas Intermediate crude for June delivery, which expires on Tuesday, slipped 63 cents or 0.6% to $108.03. The more active July contract fell 82 cents or 0.8% to $103.56. In the previous session, the benchmarks hit their highest ​levels since May 5 and April 30.

Meanwhile, the peso closed unchanged at its record low of P61.75 per dollar on Tuesday, data from the Bankers Association of the Philippines showed.

All sectoral indices closed in the red. Property slid by 1.33% or 25.73 points to 1,907.77; industrials sank by 0.91% or 79.60 points to 8,646.09; financials dropped by 0.62% or 11.10 points to 1,768.62; services fell by 0.51% or 15.54 points to 2,980.65; holding firms retreated by 0.41% or 18.38 points to 4,368.26; and mining and oil slipped by 0.07% or 12.52 points to 17,616.81.

Decliners outnumbered advancers, 107 to 63, while 74 names were unchanged.

Value turnover rose to P5.36 billion on Tuesday with 1.21 billion shares traded from the P4.05 billion with 572.41 million issues that changed hands on Monday.

Net foreign selling increased to P680.04 million from P225.76 million in the previous session. — Alexandria Grace C. Magno with Reuters