PSEi falls on profit taking, growing Gulf tensions

Philippine shares slid on Tuesday to end a four-day winning streak as investors locked in gains from the market rally, with fresh inflation risks due to the peso’s weakness and fuel price hikes amid tensions in the Gulf dampening sentiment.

The Philippine Stock Exchange index (PSEi) fell by 1.27% or 81.92 points to close at 6,333.80, while the broader all shares index went down by 0.32% or 11.11 points to end at 3,439.58.

The PSEi opened Tuesday’s session at 6,461.34, higher than Monday’s close of 6,415.72, which was an over four-month high. It climbed to a peak of 6,488.35 intraday but selling prevailed, leading the index to finish at its low for the session.

“The local bourse ended lower as investors took profits after a four-day winning streak, with the benchmark index still looking for catalysts to stabilize above the 6,400 level. The pullback was viewed as a healthy correction as the market neared overbought territory,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“Sentiment was also weighed down by the peso’s depreciation against the US dollar and the threat of the sharp increase in local oil prices.”

On Tuesday, the peso dropped by 5.90 centavos to close at PHP 61.745 against the dollar, data from the Bankers Association of the Philippines showed. It also touched its record-low close of PHP 61.75 intraday for the first time since early June.

The peso has been under pressure amid renewed hostilities in the Middle East, which have pushed up global oil prices anew. The Philippines sources about 90% of its oil supply from the area.

Diesel and kerosene prices are set to climb by more than PHP 10 per liter this week due to the re-escalation in the conflict, with some retailers implementing the hike in tranches, adding to domestic inflation pressures.

But oil prices lost more than 1% on Tuesday as markets weighed reports of mediation efforts between the US and Iran against an exchange of fresh attacks between the two and threats of a naval blockade of Saudi Arabia by Yemen’s Houthis, Reuters reported.

Most sectoral indices closed in the red. Services sank by 2.49% or 89.24 points to 3,481.36; financials dropped by 1.1% or 21.30 points to 1,912.87; holding firms fell by 0.82% or 36.71 points to 4,415.66; and property went down by 0.48% or 9.35 points to 1,917.82.

Meanwhile, mining and oil advanced by 3.51% or 533.23 points to 15,709.20, and industrials climbed by 1.26% or 105.31 points to 8,437.59.

Decliners outnumbered advancers, 107 to 91, while 52 names were unchanged.

Value turnover rose to PHP 7.94 billion on Tuesday with 702.8 million shares traded from the PHP 6.75 billion with 538.96 million issues that changed hands on Monday.

Net foreign selling was at PHP 312.45 million, a reversal from the PHP 640.40 million in net buying recorded in the previous session. — Alexandria Grace C. Magno