PSE index drops on escalating Iran-Israel conflict

Philippine shares declined on Monday as investor sentiment was soured by the escalating conflict between Israel and Iran.

The benchmark Philippine Stock Exchange index (PSEi) dropped by 0.57% or 37.01 points to close at 6,358.58, while the broader all shares index fell by 0.44% or 16.86 points to 3,768.45.

“The local market declined by the week’s start as investors dealt with the ongoing conflict between Israel and Iran and its possible economic repercussions. So far, the conflict has caused oil prices to surge, in turn posing inflationary risks to the local economy,” Philstocks Financial Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

“The peso’s depreciation also weighed on the local bourse,” Mr. Tantiangco said.

Iranian missiles struck Israel’s Tel Aviv and the port city of Haifa before dawn on Monday, killing at least eight people and destroying homes, prompting Israel’s defense minister to warn that Tehran residents would “pay the price and soon,” Reuters reported.

The dangers of further escalation loomed over a meeting of the Group of Seven leaders in Canada, with US President Donald J. Trump expressing hope on Sunday that a deal could be done but no sign of the fighting abating on a fourth day of war.

Israel began the assault with a surprise attack on Friday that wiped out the top echelon of Iran’s military command and damaged its nuclear sites, and says the campaign will escalate in the coming days.

Iran has vowed to “open the gates of hell” in retaliation.

Brent crude futures were up 0.5% in Asian trade on Monday, having surged late last week.

“Gains were capped by renewed trade uncertainty after President Donald J. Trump signaled that his July 8 tariff deadline could be extended, but warned that it might not be needed if talks wrap up early… Also during trading, Israel launched another missile attack across the city of Tehran, as tensions escalated once again between the two nations,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

Sectoral indices were mixed on Monday. Holding firms declined by 1.19% or 65.50 points to 5,423.66; property went down by 1.18% or 26.92 points to 2,240.33; and financials retreated by 0.5% or 11.98 points to 2,349.82.

Meanwhile, mining and oil went up by 1.57% or 155.89 points to 10,040.84; industrials increased by 0.22% or 20.30 points to 9,003.29; and services rose by 0.08% or 1.93 points to 2,220.04.

“Universal Robina Corp. was the top index gainer, climbing 2.3% to PHP 84.55. Alliance Global Group, Inc. was at the bottom, falling 4.27% to PHP 9.20,” Mr. Tantiangco said.

Value turnover dropped to PHP 8.82 billion on Monday with 1.07 billion shares traded from the PHP 9.87 billion with 1.16 billion issues exchanged on Friday.

Decliners outnumbered advancers, 110 versus 88, while 50 names were unchanged.

Net foreign selling stood at PHP 2.74 billion on Monday, a reversal of the PHP 648.82 million in net buying recorded on Friday. — Revin Mikhael D. Ochave with Reuters