Shares up as Mideast ceasefire boosts sentiment

Philippine shares climbed on Tuesday following news that Iran and Israel agreed to a ceasefire after exchanging attacks for nearly two weeks.

The benchmark Philippine Stock Exchange index (PSEi) rose by 1.19% or 74.47 points to close at 6,292.75, while the all shares index climbed by 0.88% or 32.64 points to 3,739.20. The PSEi returned to the 6,300 level intraday, hitting a high of 6,331.02 as the ceasefire boosted market sentiment.

“The local market bounced back, driven by hopes of peace between Israel and Iran. This comes following US President Donald J. Trump’s announcement of a ceasefire between the two countries,” Philstocks Financial Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message. “As an effect, global oil prices declined, which investors also cheered.”

Global stock markets surged and oil prices tumbled on Tuesday after the announcement of the ceasefire, in the hope it heralded a resolution of the war just two days after the United States joined it by hitting Iranian nuclear sites with huge bunker-busting bombs, Reuters reported.

However, Israeli Defense Minister Israel Katz said on Tuesday he had ordered the military to strike Tehran in response to what he said were missiles fired by Iran in a violation of the ceasefire announced hours earlier by Mr. Trump.

Iran denied violating the ceasefire. The armed forces general staff denied that there had been any launch of missiles towards Israel in recent hours, Iran’s Nour News reported.

The developments raised early doubts about the ceasefire, intended to end 12 days of war.

“Philippine shares and Wall Street traded higher, shrugging off Iran’s failed strike on a US base in Qatar,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“Markets now await Federal Reserve Chair Jerome H. Powell’s testimony before Congress, where he faces pressure to cut rates, with some officials signaling possible easing by July,” he added.

Last week, the Federal Open Market Committee left its overnight target rate range at 4.25% and 4.5%.

Almost all sectoral indices closed higher on Tuesday. Financials climbed by 2.59% or 58.86 points to 2,323.94; industrials went up by 1.41% or 126.27 points to 9,066.70; services rose by 0.72% or 15.66 points to 2,171.42; holding firms added 0.61% or 32.60 points to end at 5,358.56; and property increased by 0.22% or 4.94 points to 2,208.23.

Meanwhile, mining and oil dropped by 2.04% or 203.32 points to close the session at 9,748.75.

Value turnover went down to PHP 5.81 billion on Tuesday with 1.13 billion shares exchanged from the PHP 6.29 billion with 1.03 billion issues traded on Monday.

Advancers outnumbered decliners, 122 versus 73, while 54 names were unchanged.

Net foreign selling stood at PHP 286.36 million on Tuesday, a turnaround from the PHP 108.27 million in net buying recorded on Monday. — Revin Mikhael D. Ochave with Reuters