PHL stocks drop further as global oil prices rise

PHILIPPINE SHARES sank to a near two-week low on Monday as the conflict in the Middle East, high global oil prices, and weak buying interest dragged the market.

The Philippine Stock Exchange index (PSEi) dropped by 0.59% or 35.25 points to close at 5,941.52, while the broader all shares index fell by 0.51% or 17.28 points to end at 3,354.13.

This was the PSEi’s lowest finish since it closed at 5,898.08 on May 5.

“The local market dropped further as worries over the Middle East conflict take center stage again following US President Donald J. Trump’s latest threats towards Iran saying the country should get moving or face consequences,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

“The PSEi ended lower as buying interest stayed muted, with investors waiting for clearer market catalysts. Market sentiment remained fragile amid continued increases in global crude prices,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

Asian share markets were on the skids on Monday as fresh drone attacks in the Gulf shoved oil prices and bond yields higher, Reuters reported.

A drone strike caused a fire at a nuclear power plant in the United Arab Emirates, while Saudi Arabia reported intercepting three drones, as Mr. Trump warned that Iran must act “fast” to reach a deal.

Meanwhile, the vital Strait of Hormuz remains closed to all but a trickle of shipping as Tehran tries to formalize its control of the waterway that during normal times carries 20% of the world’s oil trade.

Brent was trading up 1.9% at $111.34 a barrel, while US crude climbed 2.2% to $107.72 a barrel. Crucially, futures for September climbed above $100 and December hit a contract high as markets braced for protracted shortages.

“The local currency also stayed weak against the US dollar, adding to cautious positioning,” Mr. Limlingan said.

The peso inched down by 2.9 centavos to close at a new all-time low of P61.75 against the dollar on Monday, data from the Bankers Association of the Philippines showed.

Most sectoral indices closed lower on Monday. Mining and oil slid by 3.43% or 626.71 points to 17,629.33; financials sank by 1.04% or 18.75 points to 1,779.72; holding firms dropped by 0.73% or 32.45 points to 4,386.64; industrials fell by 0.5% or 44.33 points to 8,725.69; and services went down by 0.47% or 14.24 points to 2,996.19.

Meanwhile, property rose by 0.18% or 3.61 points to 1,933.50.

Decliners outnumbered advancers, 117 to 65, while 68 names were unchanged.

Value turnover fell to P4.05 billion on Monday with 572.41 million shares traded from the P6.32 billion with 592.04 million issues that changed hands on Friday.

Net foreign selling increased to P225.76 million from P195.41 million the previous session. — Alexandria Grace C. Magno with Reuters