PSEi slides to 4-month low as Iran war escalates

The main index sank to an over four-month low on Monday as the war in the Middle East escalated further, worsening market worries over the economic fallout from the conflict.

The benchmark Philippine Stock Exchange index (PSEi) fell by 1.73% or 103.34 points to close at 5,869.49, while the broader all shares index went down by 1.19% or 40.01 points to end at 3,295.85.

This was the PSEi’s worst close so far this year and is its lowest finish since it ended at 5,813.71 on Nov. 19.

“The Philippine market opened the week lower as the Middle East war entered its fifth week, the conflict continued to escalate despite ongoing efforts to reach a diplomatic resolution,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“The prolonged tensions have continued to weigh on market risk appetite, as both geopolitical and economic factors persistently dampen investor sentiment. External uncertainties and macroeconomic pressures continue to drive cautious trading behavior across markets.”

Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message that the market kicked off the shortened trading week on a sour note amid fading hopes of a de-escalation in the conflict. “Global oil prices remain elevated while the peso depreciates, further keeping worries over the Philippines’ inflation outlook high.”

The Israeli military said on Monday that Iran launched multiple waves of missiles at Israel, and an attack had also been launched from Yemen for only the second time since the US-Israeli war began, Reuters reported.

The latest attacks came a day after President Donald J. Trump said the US and Iran had been meeting “directly and indirectly” and that Iran’s new leaders have been “very reasonable,” as more US troops arrived in the region.

Stocks slumped in Asia on Monday as investors dug in for a protracted conflict, bringing a spike in inflation and the risk of recession to much of the globe.

Meanwhile, oil prices looked poised to extend their gains. Brent crude futures jumped USD 2.43, or 2.16%, to USD 115 a barrel by 0342 GMT after settling 4.2% higher on Friday.

Majority of sectoral indices closed lower on Monday. Financials slid by 3.25% or 61.41 points to 1,827.44; mining and oil sank by 2.41% or 380.76 points to 15,380.12; holding firms dropped by 2.30% or 106.29 points to 4,515.32; property retreated by 1.89% or 37.36 points to 1,936.23; and industrials went down by 0.97% or 86.26 points to 8,749.35.

Meanwhile, services edged up by 0.03% or 0.83 point to 2,719.12.

Decliners outnumbered advancers, 126 to 74, while 60 names closed unchanged.

Value turnover went down to PHP 8.29 billion on Monday with 746.28 million shares traded from the PHP 8.95 billion with 2.47 billion issues that changed hands on Friday.

Net foreign selling ballooned to PHP 1.55 billion from the PHP 95.54 million in the previous session. — A.G.C. Magno with Reuters