Stocks sink as uncertainty weighs on markets

Philippine shares retreated on Thursday as investors cashed in on the market’s two-day climb and amid continued uncertainty over the conflict in the Middle East.

The benchmark Philippine Stock Exchange index (PSEi) fell by 0.99% or 59.97 points to close at 5,984.20, while the broader all shares index went down by 0.65% or 22.05 points to end at 3,334.11.

“The local market pulled back as investors took profits following two straight days of rallying. This comes as Iran stated that it has no intention of holding talks with the US, blurring the possibility of the two reaching a resolution,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

“The PSEi closed lower on Thursday due to profit taking and cautious sentiment amid the lingering impact of Middle East tensions, as well as the Bangko Sentral ng Pilipinas’ (BSP) decision to keep interest rates steady, which further weighed on the peso,” Unicapital Securities, Inc. Research Head Wendy B. Estacio-Cruz said in a Viber message.

Asian stocks slid in choppy trading while the oil rose on Thursday as investors treaded cautiously amid the dizzying pace of developments in the Middle East, with Iran saying it would weigh a US proposal to end the conflict, Reuters reported.

US President ​Donald J. Trump said Iran was desperate to make a deal while Iranian Foreign Minister Abbas Araghchi said there had been no dialogue or negotiations with the US, although various messages had been exchanged through intermediaries.

Meanwhile, the Monetary Board was scheduled to have its next policy review on April 23, but BSP Governor Eli M. Remolona, Jr. said they decided to hold a meeting on Thursday as the economic situation has drastically changed since they last met on Feb. 19.

At its review, the BSP kept the policy rate at 4.25%, with Mr. Remolona saying that adjusting their monetary settings would have limited effectiveness as the current inflation risks due to the war in the Middle East are largely supply-driven.

The peso weakened by 13 centavos to close at PHP 60.23 against the greenback on Thursday from its PHP 60.10 finish on Wednesday.

Majority of sectoral indices closed lower on Thursday. Financials fell by 1.35% or 26.15 points to 1,899.30; property sank by 1.28% or 25.60 points to 1,972.84; services dropped by 1% or 27.73 points to 2,731.65; holding firms retreated by 0.42% or 19.56 points to 4,590.55; and industrials went down by 0.34% or 30.65 points to 8,847.43.

Meanwhile, mining and oil climbed by 1.14% or 179.04 points to 15,874.93.

Decliners outnumbered advancers, 100 to 78, while 71 names closed unchanged.

Value turnover rose to PHP 7.88 billion on Thursday with 1.65 billion shares traded from the PHP 7.37 billion with 1.15 billion issues that changed hands on Wednesday.

Net foreign selling was at PHP 135.29 million versus the PHP 224.69 million in net buying in the previous session. — Alexandria Grace C. Magno with Reuters