PSEi up on bargain hunting as ME war continues

PHILIPPINE STOCKS advanced on Monday as investors picked up bargains and with markets still on edge as the Middle East (ME) war continues amid a fragile ceasefire.

The Philippine Stock Exchange index (PSEi) rose by 0.28% or 16.90 points to close at 6,016.03, while the broader all shares index went up by 0.22% or 7.66 points to end at 3,382.44.

“Philippine equities held their ground, tracking Wall Street gains despite the overnight status change in the Strait of Hormuz, suggesting growing desensitization to volatility driven by developments in the Iran conflict,” AP Securities, Inc. said in a market note.

“The PSEi bounced back from Friday’s drop, reclaiming the 6,000 level on bargain hunting, though gains were tempered by selling pressure in the afternoon session. Sentiment stayed cautious after Iran threatened retaliation over the US seizure of a cargo ship, with its participation in peace talks in Pakistan still unconfirmed,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

Concerns grew on Monday that the ceasefire between the United States and Iran might collapse after the US said it had seized an Iranian cargo ship that tried to run its blockade and Iran vowed to retaliate, Reuters reported.

Efforts to build a more lasting peace in the region also appeared under threat, as Iran said it would not participate in a second round of negotiations that the US had hoped to kick off before the ceasefire expires.

The US has maintained a blockade of Iranian ports, while Iran has lifted and then reimposed its own blockade on marine traffic passing through the Strait of Hormuz, which typically handles roughly one-fifth of the world’s oil supply.

The US military said it fired on an Iranian-flagged cargo ship headed towards Iran’s Bandar Abbas port on Sunday after a six-hour standoff, disabling its engines.

Oil prices jumped more than 5% and stock markets wobbled as traders fretted that the ceasefire would collapse and traffic in and out of the Gulf would remain at a bare minimum.

Back home, sectoral indices closed mixed on Monday. Holding firms rose by 0.86% or 39.73 points to 4,629.04; services increased by 0.69% or 19.25 points to 2,781.03; and mining and oil went up by 0.44% or 79.02 points to 18,049.97.

Meanwhile, industrials declined by 0.34% or 30.13 points to 8,816.01; property dropped by 0.26% or 5.28 points to 2,000.03; and financials went down by 0.14% or 2.73 points to 1,899.07.

Decliners narrowly beat advancers, 105 to 101, while 60 names closed unchanged.

Value turnover declined to P7.17 billion on Monday with 686.11 million shares traded from the P7.44 billion with 1.1 billion issues that changed hands on Friday.

Net foreign selling decreased to P446.83 million from P1.70 billion in the previous session. — Alexandria Grace C. Magno with Reuters