PSEi edges lower on weak peso, Middle East war

The main index opened the week in negative territory as investors remained cautious amid continued weakness in the peso and the war between the United States and Iran.

The bellwether Philippine Stock Exchange index (PSEi) declined by 0.11% or 6.92 points to close at 6,083.68 on Monday. Meanwhile, the broader all shares index edged up by 0.04% to 1.51 points to end at 3,378.95.

The PSEi moved sideways for most of the session as it opened at 6,098.19, up slightly from Friday’s close of 6,090.60. Its high was at 6,103.74, while its low was at 6,058.89.

“The local index closed lower as investors remained cautious amid the continued depreciation of the local currency against the greenback,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message. “Moreover, ongoing tensions surrounding Iran and US and elevated oil prices continued to weigh on market sentiment.”

“Overall, investors remained on the sidelines amid heightened geopolitical, currency, and commodity-related risks.”

Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said the main stock benchmark dropped as the peso touched a new record low intraday. “The negative cues from Wall Street amid concerns of a possible tightening by the Federal Reserve following strong August job figures in the US also weighed on the local market,” he added.

On Monday, the peso hit an intraday low of PHP 62.775, which is now the worst level it has touched in history. Still, it managed to recoup its losses as it closed at PHP 62.586, just slightly better than Friday’s record-low finish of PHP 62.59.

Meanwhile, Tehran said it will announce a restricted zone outside the Strait of Hormuz in coming days, after US forces hit three Iranian tankers and Iran’s Islamic Revolutionary Guard Corps launched ballistic missiles at two US Navy ships, Reuters reported.

As a result, Brent crude futures rose nearly 1.5% to USD 97.6 a barrel, the most in seven weeks. The oil price surged almost 8% last week and is now 35% above where it was in late February.

Majority of sectoral indices closed in the red. Property declined by 0.38% or 7.16 points to 1,873.16; financials shed 0.31% or 6.04 points to 1,916.28; services went down by 0.14% or 4.43 points to 3,256.64; mining and oil decreased 0.14% or 29.73 points to 21,035.71; and holding firms slipped by 0.13% or 5.65 points to 4,362.97.

Meanwhile, industrial rose by 0.97% or 76.82 points to 7,983.94.

“Manila Electric Co. was the day’s index leader, climbing 3.9% to PHP 480. DigiPlus Interactive Corp. was the main index laggard, falling 3.1% to PHP 9.38,” Mr. Tantiangco said.

Decliners narrowly outnumbered advancers, 98 to 92, while 70 names were unchanged.

Value turnover inched up to PHP 3.89 billion on Monday with 699.78 million shares traded from the PHP 3.86 billion with 2.01 billion issues that changed hands on Friday.

Net foreign selling decreased to PHP 311.05 million from PHP 357.82 million previously. — Sheldeen Joy Talavera