Shares rebound sharply on hopes of end to war

Philippine shares rebounded strongly on Tuesday amid hopes of an end to the Middle East conflict and bargain hunting after Monday’s sharp drop.

The Philippine Stock Exchange index (PSEi) jumped by 2% or 120.44 points to close at 6,126.66, while the broader all shares index went up by 1.81% or 60.86 points to end at 3,407.61.

“PSEi rebounded sharply after (Monday’s) sell-off, tracking gains in global equities as optimism over potential geopolitical de-escalation improved risk sentiment following President (Donald J.) Trump’s remarks suggesting the conflict may end soon,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“The Philippine Stock Exchange index rebounded on Tuesday … as investors engaged in bargain hunting following the previous day’s sharp sell-off while also taking cues from the strong rebound in US equities. US stocks recovered in regular trading after earlier losses after President Donald J. Trump said the war was ‘pretty much complete’ and that the US was considering taking control of the Strait of Hormuz,” Unicapital Securities, Inc. Research Head Wendy B. Estacio-Cruz said in a Viber message.

On Monday, the PSEi sank by 4.97% or 314.19 points to close at 6,006.22, marking its steepest single-day drop since April 2020, as oil prices surged past $100 a barrel amid the conflict.

Iran’s Revolutionary Guards said on Tuesday they would not let any oil be shipped from the Middle East if US and Israeli attacks continue, prompting Mr. Trump to say the US would hit Iran much harder if it blocked exports, Reuters reported.

The rhetoric did little to quell a fall in crude prices and a rally in global shares that followed Mr. Trump expressing confidence in a swift end to hostilities, even after Iran showed defiance by naming Mojtaba Khamenei as its new supreme leader.

All sectoral indices closed in the green on Tuesday. Mining and oil rose by 3.23% or 560.02 points to 17,885.39; services increased by 2.88% or 77.86 points to 2,779.48; financials went up by 1.89% or 36.51 points to 1,964.58; industrials climbed by 1.82% or 157.15 points to 8,791.81; holding firms increased by 1.79% or 83.03 points to 4,707.45; and property advanced by 0.97% or 19.65 points to 2,039.81.

Advancers outnumbered decliners, 147 to 58, while 64 names closed unchanged.

Value turnover went down to PHP 7.49 billion on Tuesday with 1.4 billion shares traded from the PHP 11.08 billion with 2.54 billion issues that changed hands on Monday.

Net foreign selling declined to PHP 498.05 million from the PHP 1.58 billion in the previous session.

“Despite the broad-based recovery, the rebound remains fragile as investors stay cautious, with sustained gains likely dependent on continued positive cues from global markets and clearer developments in ongoing geopolitical tensions,” Mr. Limlingan said.

Ms. Estacio-Cruz added that the market will continue to monitor global developments and their potential impact on financial markets. — Alexandria Grace C. Magno