PSEi slides to 6,000 level on Middle East woes

PHILIPPINE SHARES dropped to the 6,000 range on Monday as investors remain cautious over developments in the Middle East and with the peso’s slide back to the P61 range following a rebound early last week weighing on sentiment.

The Philippine Stock Exchange index (PSEi) plunged by 1.63% or 100.33 points to close at 6,035.02, while the broader all shares index fell by 1.17% or 39.69 points to end at 3,341.08.

“The local bourse ended lower amid broad-based foreign selling across sectors. Meanwhile, the local currency weakened further against the US dollar, breaching the 61 level again. Overall, sentiment remained pressured by sustained capital outflows and currency depreciation concerns,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

The peso slid by 34.8 centavos to close at P61.123 against the dollar on Monday from Friday’s finish of P60.775, data from the Bankers Association of the Philippines showed.

“The local market dropped as cracks began to appear in the US-Iran interim deal. This comes as Iran closes the Strait of Hormuz again amid the US’ alleged failure to stop attacks on Lebanon. In return, US President Donald Trump made threats of military actions against Iran,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

US and Iranian officials made “encouraging progress” at a first round of talks in Switzerland that ended early on Monday, mediators said, although tension persisted over Lebanon and the Strait of Hormuz, Reuters reported.

Mediators Pakistan and Qatar said the parties had agreed to a roadmap towards a final deal on ending their war in 60 days, despite a tense start as Tehran again shut the strait and Mr. Trump threatened to resume attacks on Iran.

They said the two sides had agreed to a mechanism to end fighting between US ally Israel and Iran-aligned Hezbollah militants in Lebanon, and opened a communications line to help ensure safe passage for commercial ships through the strait, a vital global supply route for oil and liquefied natural gas.

Most sectoral indices closed lower. Services sank by 3.91% or 126.93 points to 3,116.85; industrials slid by 1.97% or 167.04 points to 8,281.54; financials dropped by 0.68% or 13.25 points to 1,923.38; mining and oil fell by 0.67% or 107.85 points to 15,782.60; and property went down by 0.35% or 6.6 points to 1,853.60.

Holding firms rose by 0.57% or 24.70 points to 4,318.39.

Decliners outnumbered advancers, 116 to 74, while 50 names were unchanged.

Value turnover went down to P10.26 billion on Monday with 994.52 million shares traded from the P11.18 billion with 1.32 billion issues that changed hands on Friday.

Net foreign selling increased to P924.26 million from P451.99 million in the previous session. — Alexandria Grace C. Magno with Reuters