PSEi plunges to 5,800 level as war roils markets

Philippine stocks plunged on Monday, with the benchmark index sinking to the 5,800 level for the first time since December last year, as the worsening conflict in the Middle East and its impact on global oil prices continued to rattle markets.

The Philippine Stock Exchange index (PSEi) slid by 1.98% or 119.44 points to close at 5,899.18, while the broader all shares index went down by 2.04% or 68.28 points to end at 3,276.59.

This was the PSEi’s worst close so far this year as this was its lowest finish in nearly four months or since it ended at 5,887.58 on Dec. 4. Mining and oil companies posted the biggest losses, with the sector’s counter down by nearly 9%.

“Philippine equities kicked off the week with a massive sell-off as Middle East tensions further deepened concerns about the inflationary effects of oil shocks on the global economy, while the Federal Reserve’s hawkish pause added to investors’ worries,” AP Securities, Inc. said in a market note.

“The local market plunged as the further escalation of tensions between the US and Iran weighed on investors’ sentiment,” Japhet Louis O. Tantiangco, research manager at Philstocks Financial, Inc., said in a Viber message. “This comes as the two countries exchanged threats amid the US’ demand for the complete reopening of the Strait of Hormuz.”

Share markets slid in Asia on Monday as the United States and Iran traded escalating threats and Israel planned for “weeks” more fighting, sending oil prices on another roller-coaster ride, Reuters reported.

Oil prices rose again, with US crude futures up 3% to over USD 100 a barrel, reviving inflation fears and putting central banks in a tough spot with regard to monetary policy. International Energy Agency boss Fatih Birol warned the crisis was “very severe” and worse than the two oil shocks of the 1970s put together.

All sectoral indices ended in the red on Monday. Mining and oil was the worst performer, plummeting by 8.71% or 1,393.02 points to 14,591.81. Holding firms also sank by 2.99% or 138.78 points to 4,496.53; property plunged by 2.98% or 59.24 points to 1,928.11; financials dropped by 2.49% or 47.6 points to 1,858.80; industrials fell by 1.16% or 102.14 points to 8,690.39; and services decreased by 0.95% or 26.19 points to 2,726.18.

“Only two index members closed the day with gains, namely the Manila Electric Co. up 1.16% and Aboitiz Equity Ventures, Inc. up 0.68%. Converge ICT Solutions, Inc. was the worst index performer for the day, sliding 8.61% to PHP 12.10,” Mr. Tantiangco said.

Decliners overwhelmed advancers, 167 to 46, while 58 names closed unchanged.

Value turnover declined to PHP 8.17 billion on Monday with 1.36 billion shares traded from the PHP 10.11 billion with 1.88 billion issues that changed hands on Thursday.

Net foreign selling ballooned to PHP 1.34 billion from PHP 460.37 million in the previous session. — Alexandria Grace C. Magno with Reuters