PHL stocks drop as global oil prices surge again
PHILIPPINE STOCKS dropped anew on Thursday following a two-day climb as the prolonged war in Iran caused global oil prices to spike again, worsening inflation concerns.
The bellwether Philippine Stock Exchange index (PSEi) retreated by 0.72% or 44.75 points to close at 6,113.58, while the broader all shares index went down by 0.66% or 22.63 points to end at 3,405.40.
“PSEi ended lower as the market entered selling mode after oil prices surged again to $100 per barrel,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message. “The spike in oil heightened inflation concerns and dampened investors’ risk appetite, raising the possibility of a rate hike by the Bangko Sentral ng Pilipinas (BSP). As a result, broad-based selling emerged across sectors as market sentiment turned cautious.”
“The local market pulled back as worries over the Middle East conflict and its impact on oil prices dominated sentiment again. This comes after Iran warned of oil hitting $200 per barrel amid its war with the US. The peso’s weakness also weighed on the local bourse,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.
Last week, BSP Governor Eli M. Remolona, Jr. said headline inflation could breach 4% if oil hits $100 a barrel, adding that if fuel prices rise sharply and persistently, they could be forced to tighten their policy stance.
Meanwhile, the peso weakened by 21.5 centavos to close at P59.385 against the greenback on Thursday from P59.17 on Wednesday, data from the Bankers Association of the Philippines showed.
Global shares fell on Thursday as attacks on oil tankers in the Gulf shattered any prospects of an imminent de-escalation in the Middle East conflict, pushing oil prices above $100 a barrel and stoking fresh inflation concerns, Reuters reported.
Brent crude futures jumped as much as 10.4% to $101.59 a barrel, before trimming gains, as doubts persisted over whether reserve releases would be enough to cushion the hit from the Middle East supply shock.
US crude futures were last trading 5.2% higher at $91.82.
Majority of sectoral indices closed lower on Thursday. Mining and oil fell by 2.27% or 425.13 points to 18,294.38; services decreased by 3.28% or 93.34 points to 2,751.89; industrials went down by 0.37% or 33.27 points to 8,870.84; financials dropped by 0.34% or 6.75 points to 1,949.43; and property sank by 0.25% or 5.20 points to 2,039.42.
Meanwhile, holding firms climbed by 1.32% or 62.06 points to 4,732.27.
Decliners outnumbered advancers, 125 to 60, while 65 names closed unchanged.
Value turnover rose to P8.37 billion on Thursday with 1.05 billion shares traded from the P7.95 billion with 1.37 billion issues that changed hands on Wednesday.
Net foreign selling increased to P453.03 million from P219.41 million. — A.G.C. Magno with Reuters
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