Stocks, peso rebound as oil fears ease

Philippine shares, as well as the local currency, rebounded on Tuesday, with the benchmark Philippine Stock Exchange index (PSEi) closing at 6,126.66, up 120.44 points or 2.01 percent.

Investor sentiment improved following remarks from US President Donald Trump suggesting the conflict with Iran could deescalate. The American leader warned of severe consequences for Iran should the Strait of Hormuz remain shut down.

Fears tempered

Global oil prices eased following Trump’s statements, helping temper fears of a major supply disruption in the Middle East and providing some cushion for local investors as well as the peso.

Monday’s plunge saw the local bourse fall nearly five percent — the largest single-day decline of the year so far. With oil price hikes set to take place over the next three days, investors remain cautious, as Tuesday’s trading activity stayed relatively subdued.

Net value turnover reached P6.38 billion, below the year-to-date average of P6.61 billion, while foreign investors registered net outflows of about P498.05 million.

All sectors closed higher

All sectors closed higher, led by Mining & Oil, which climbed 3.23 percent, reflecting volatility in commodity-linked stocks as investors moved into fuel-related counters following the first tranche of staggered price hikes implemented Tuesday morning.

Advancers outnumbered decliners, 147 to 58.

Among index members, Century Pacific Food Inc. was the top gainer, surging 6.25 percent to P34.00, while San Miguel Corp. was the lone decliner, slipping 0.99 percent to P69.75.

The Philippine peso likewise strengthened to around P58.89 per US dollar, improving from the previous session’s close of about P59.50 and slightly stronger than last week’s close near P59.00.

The peso’s rebound was largely driven by easing global oil prices and a slight pullback in the US dollar after signals that geopolitical tensions in the Middle East — particularly involving Israel and Iran — may not escalate further.

Oil prices, which had surged earlier on fears of potential disruptions in key shipping routes such as the Strait of Hormuz, retreated to around $82 per barrel for Brent crude, easing concerns over higher import costs and inflation for oil-importing economies like the Philippines.

US Dollar Index softens

At the same time, the US Dollar Index softened slightly, reducing pressure on emerging-market currencies. Improved risk appetite in global markets, supported by gains on Wall Street, also encouraged some recovery in regional currencies and equities.

However, the peso’s gains remain limited by elevated US Treasury yields near 4.2 to 4.3 percent, which continue to attract capital flows into dollar assets and keep the broader bias tilted toward a stronger US currency.