PHILIPPINE shares pulled back on Thursday as investors took profits after a two-day rally, while rising global oil prices added to concerns over inflation and economic growth.
The Philippine peso also weakened anew amid expectations of a rate hike by the US Federal Reserve.
The benchmark Philippine Stock Exchange index (PSEi) fell 17.30 points, or 0.28 percent, to 6,099.23 as Brent crude breached the $100-per-barrel mark amid renewed tensions in the Middle East.
The decline came after the PSEi gained 0.37 percent on Tuesday and 0.17 percent on Wednesday as investors hunted for bargains following the market’s earlier weakness.
“The local market pulled back as investors booked gains after a two-day rise,” said Japhet Tantiangco, research manager at Philstocks Financial Inc.
Tantiangco said worries over rising global oil prices and their potential impact on Philippine inflation also weighed on sentiment.
Luis Limlingan, head of sales at Regina Capital Development Corp., said the local bourse faced broad selling pressure as oil prices topped $100 per barrel.
“Sentiment also weakened as global markets tracked renewed uncertainty after President Trump’s remarks that the US-Iran war could continue beyond the US midterm elections,” Limlingan said.
“The combination of elevated oil prices and prolonged geopolitical uncertainty kept investors defensive and weighed on risk appetite,” he added.
Despite the decline in the index, foreign investors remained net buyers, posting inflows of P166.60 million.
Trading was also stronger, with net value turnover reaching P6.85 billion. Market breadth remained negative, however, with 93 decliners against 83 gainers, while 67 issues were unchanged.
Mining and oil stocks bucked the broader market decline, gaining 2.59 percent, while conglomerates fell 1.17 percent to lead the losing sectors.
DMC Holdings Inc. was the day’s top PSEi performer, climbing 3.14 percent to P8.22, while DigiPlus Interactive Corp. (PLUS) was the biggest index laggard, falling 3.10 percent to P9.06.
For its part, the Philippine peso weakened by 2.2 centavos to P62.535 from Wednesday’s P62.513:$1.
It opened at P62.5 and traded between P62.5 and P62.58 during the session. Trading volume dropped to $1.189 billion from $1.681 billion in the previous session.
Union Bank chief economist Ruben Carlo Asuncion said the peso weakened as higher oil prices and expectations of a possible Fed rate hike continued to support the US dollar.
“Markets are now focused on US inflation data and next week's FOMC Federal Open Market Committee) meeting, which will likely determine near-term direction for both the dollar and the peso,” Asuncion said.
“For now, volatility remains elevated, with risks still biased toward peso weakness,” he added.
