THE peso and stock market rebounded on Tuesday after United States President Donald Trump said that the war on Iran could soon end.
The currency, which hit a record low of P59.50 to the dollar on Monday as global oil prices topped $100 per barrel, strengthened by 60.4 centavos to P58.896:$1.
It opened at P59.25 and traded from P58.86 to P59.345. Volume reached P2.026 billion, down from P2.597 billion a day earlier.
The benchmark Philippine Stock Exchange index (PSEi), meanwhile, climbed 2.01 percent, or 120.44 points, to 6.126.66 after plunging nearly 5 percent on Monday.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the peso and PSEi regained ground after oil price fell after Trump claimed the war on Iran was “very complete, pretty much.”
Luis Limlingan, head of sales at Regina Capital Development Corp., said the PSEi’s rebound reflected improving risk appetite but added that sustained gains would depend on clearer developments on the Iran situation.
Philstocks Financial Inc. research analyst Japhet Tantiangco said trading remained somewhat subdued with a net value turnover of P6.38 billion, slightly below the year‑to‑date average of P6.61 billion.
Foreign investors were net sellers with outflows of P498.05 million.
All sectors closed in the green, led by miners that gained 3.23 percent, and advancers outnumbered decliners, 147 to 58, with 64 unchanged.
Strategy rethink
Analysts, meanwhile, said the war in the Middle East was forcing investors to rethink strategies, with utilities, power and telecoms possible potential safe havens.
“The spike in crude prices raises near-term inflation risks and could delay monetary easing or even force the Bangko Sentral ng Pilipinas to hike rates, weighing on overall market sentiment and growth expectations,” Unicapital Securities said in a report.
In a worst-case scenario, the PSEi could fall to 5,800 while a contained geopolitical situation could support a target of 6,800.
Manny Ocampo, president and COO of Investment and Capital Corp. of the Philippines, said the higher oil prices could ripple through power, logistics and goods, while fuel distributors might benefit if they were able to secure forward positions.
Jarrod Tin, research analyst at DragonFi Securities Inc., said “consumer discretionary companies may be the most vulnerable, as households cut back on nonessential spending during periods of elevated inflation.
“REITs (real estate investment trusts) may also face pressure should interest rates move higher,” he added.
Meanwhile, “utilities and energy-related stocks provide essential goods and services with inelastic demand, making their revenues less sensitive to economic slowdowns.”
Unicapital also highlighted firms with export exposure or dollar revenues as possible beneficiaries from a weaker peso.
Investors, analysts said, should focus on sector positioning and earnings stability to weather continued volatility.