PSEi rallies anew on easing tensions, oil price retreat

The Philippine Stock Exchange index (PSEi) extended its winning streak for a second straight session, rising by 32.89 points or 0.52 percent to close at 6,325.64 on Tuesday, marking its highest finish in nearly three and a half months, or since 10 March 2025.

Market sentiment improved on the back of easing geopolitical tensions in the Middle East, a sharp drop in oil prices, and dovish signals from U.S. Federal Reserve officials.

Michael Ricafort, chief economist at Rizal Commercial Banking Corporation, attributed the rally to the tentative ceasefire between Israel and Iran announced by U.S. President Donald Trump, which helped pull down global crude oil prices to new two-week lows.

“The benchmark NYMEX crude settled at around $65 per barrel, erasing all gains since the conflict erupted on June 13, and well below the previous day’s intraday high of $78.40,” Ricafort said. 

“This is a positive development for the Philippines, as it could pave the way for a rollback in local fuel prices after recent hikes.”

Ricafort also noted the peso’s recovery, which strengthened to 56.70 against the U.S. dollar – a one-week low – after touching an intraday low of 56.65, from 57.16 in the previous session. 

"Lower oil prices and a stronger peso could help ease import costs and temper inflation pressures," he added.

Adding to the optimism were renewed expectations of a possible Fed rate cut later this year, with markets now pricing in around 0.60 percentage points worth of reductions for the rest of 2025, slightly above the Fed's latest projection.

Meanwhile, Luis Limlingan, head of sales at Regina Capital Development Corporation, said investors welcomed the fragile ceasefire between Israel and Iran, despite lingering tensions and mutual accusations of violations.

“Philippine shares rose while oil extended losses for a second straight day. Although President Trump expressed frustration with both sides, he confirmed that the truce remains in place,” Limlingan said. 

“At the same time, Fed Chair Jerome Powell, in his testimony before U.S. lawmakers, reiterated that the central bank is in no rush to cut rates, preferring to assess the full impact of Trump’s recent tariff measures.”