PHILIPPINE shares retreated and the peso also slumped on Monday as investors shunned risk assets amid heightened Middle East worries, with rising oil prices and a weaker peso adding pressure on market sentiment.
The benchmark Philippine Stock Exchange index (PSEi) fell 0.99 percent, or 58.97 points, to close at 5,879.41 on Monday, while the broader All Shares index also ended lower.
The peso weakened by 22 centavos to P61.69:$1, a result Rizal Commercial Banking Corp. chief economist Michael Ricafort said was due to the dollar having strengthened amid expectation of a Federal Reserve rate hike and renewed conflict in the Middle East.
Philstocks Financial research manager Japhet Tantiangco said the PSEi tracked the negative tone across global markets following the latest exchange of military strikes between Iran and Israel.
“The tensions also caused global oil prices to rise and the local currency to depreciate within the day,” he said.
Regina Capital Development Corp. head of sales Luis Limlingan said investors adopted a defensive stance as geopolitical risks intensified.
“The PSEi closed lower as selling pressure mirrored sharp declines across regional markets,” he said.
“Risk appetite weakened amid heightened geopolitical uncertainty following reports of renewed strikes involving Iran, reinforcing a risk-averse market tone,” Limlingan added.
All sectoral indices finished in the red, led by mining and oil stocks, which plunged 4.04 percent as investors locked in gains and reassessed commodity-related risks.
The decline came despite higher crude prices that are expected to add to inflationary pressures if sustained, analysts said.
Market breadth remained heavily negative, with 133 decliners outpacing 53 advancers, while 55 issues were unchanged.
Foreign investors remained net sellers, pulling out P754.31 million worth of shares, while total value turnover reached P5.57 billion.
