PSEi sinks to 6,300 range, joins Asia stock rout

Philippine shares sank on Wednesday to pull the main gauge back to the 6,300 level, joining a regional rout, on heightened inflation concerns as the ongoing conflict in the Middle East continued to drive up oil prices.

The Philippine Stock Exchange index (PSEi) decreased by 2.13% or 137.54 points to close at 6,307.84, while the broader all shares index went down by 2.02% or 72.09 points to end at 3,485.62.

This was the PSEi’s lowest finish in a month or since it closed at 6,297.08 on Feb. 2.

“The market sank as the Iran war continued, pushing more investors to the sidelines as worries that rising oil prices could accelerate inflation heighten,” AP Securities, Inc. said in a market note.

“The local bourse declined again after a day of relief as the conflict in the Middle East weighed on sentiment,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message. “Investors were worried over the effects of the war in the Middle East, primarily the rise in oil prices, on the local economy, especially on inflation, the peso, and economic growth.”

Asian stocks tanked on Wednesday, with a record-breaking market crash in Seoul, as investors dumped crowded bets on chipmakers on worries a widening Middle East war will drive an oil shock that raises inflation and delays interest rate cuts, Reuters reported.

Asia is heavily dependent on energy imports shipped through the near-shuttered Strait of Hormuz and nowhere was the strain clearer than in Seoul, where the session finished with the market plunging 12%, the largest drop on record.

Benchmark Brent crude oil futures were on the rise and up more than 13% for the week at USD 82.08 a barrel, though prices have come off highs since US President Donald J. Trump ordered an insurance guarantee on Gulf shipping and said the navy may escort oil tankers through the Strait of Hormuz.

All sectoral indices ended lower on Wednesday. Mining and oil plummeted by 6.37% or 1242.69 points to 18,252.96; financials sank by 3% or 63.52 points to 2,050.18; property plunged by 2.48% or 53.82 points to 2,108.16; holding firms dropped by 2.47% or 125.06 points to 4,929.90; industrials fell by 2.43% or 221.58 points to 8,892.09; and services decreased by 0.55% or 15.64 points to 2,800.05.

Decliners overwhelmed advancers, 179 to 35, while 58 names closed unchanged.

“There were only three index gainers for the day led by International Container Terminal Services, Inc., climbing 0.85% to PHP 715. DigiPlus Interactive Corp. was the worst index performer, plunging 8.33% to PHP 16.94,” Mr. Tantiangco said.

Value turnover declined to PHP 8.67 billion on Wednesday with 4.5 billion shares traded from the PHP 8.88 billion with 3.15 billion issues that changed hands on Tuesday.

Net foreign selling was at PHP 1.31 billion, a reversal of the PHP 1.57 billion in net buying recorded in the previous session. — A.G.C. Magno with Reuters