Investors buy the dip as peso as oil prices weaken peso

The Philippine Stock Exchange Index (PSEi) finished Tuesday at 6,445.38, up 0.29 percent, as the market staged a modest rebound on bargain hunting, snapping a two-day losing streak that included Monday’s sharp sell-off — the largest single-day decline for the local bourse so far this year.

Investors selectively accumulated blue-chip names following the steep correction, taking advantage of lower valuations. However, risk appetite remained restrained amid surging global oil prices and a weakening peso driven by the ongoing Middle East conflict. While dip buyers provided support, overall sentiment stayed cautious as traders braced for the possibility of further oil price spikes linked to tensions involving Iran.

Participation softened compared to the prior session, with net value turnover declining to P6.93 billion from Monday’s P7.50 billion, reflecting a tentative recovery rather than a broad-based rally. Foreign investors lent support, registering net inflows of P1.57 billion, helping stabilize the index.

Sector performance was largely negative. Services was the lone gainer, climbing 3.03 percent, while Mining and Oil posted the steepest drop, falling 2.24 percent as profit-taking emerged following recent commodity-driven gains. Market breadth remained weak, with 117 decliners versus 83 advancers, indicating that gains were concentrated in select issues.

DigiPlus Interactive Corp. (PLUS) led the index, surging 10.66 percent to P18.48 after news that Chairman Eusebio Tanco acquired additional shares, reinforcing investor confidence in the company’s growth prospects. In contrast, Century Pacific Food, Inc. (CNPF) declined 3.25 percent to P37.25, emerging as the session’s biggest laggard as investors rotated out of defensive consumer names.

On the currency front, the peso weakened further, closing at P58.43 per dollar from P58.20 previously — a 23-centavo depreciation — as higher oil prices and a firmer U.S. dollar continued to pressure the local unit.

Oil prices climbed sharply as conflict between the United States, Israel, and Iran intensified, raising fears of supply disruptions through the Strait of Hormuz, a vital global shipping corridor for crude. Brent crude rose above $80.89 per barrel, while West Texas Intermediate (WTI) traded around $73.78, extending a sustained rally as markets priced in heightened geopolitical risk.

In addition, the U.S. dollar strengthened as safe-haven flows increased in response to the geopolitical shock. The U.S. Dollar Index held near multi-week highs as traders weighed the potential inflationary impact of higher energy prices and the possible implications for global interest rates. Elevated U.S. Treasury yields also supported the greenback, prompting capital to flow back into dollar-denominated assets at the expense of emerging-market currencies such as the peso.

Industry sources reported Tuesday evening that diesel is seen rising by P10.00 to P10.20 per liter and gasoline by P5.30 to P5.50 next week in light of the Iran situation – another point of contention for both the local bourse and the peso moving forward.