PSEi extends decline as risk aversion deepens

The flagship Philippine Stock Exchange index (PSEi) extended its losses to start the trading week, closing at 5,901.15 (-0.71%) on Monday, 27 April.

Investor sentiment remained weighed down by spillover effects from the Middle East conflict, including persistent inflation concerns and expectations of further monetary tightening following the Bangko Sentral ng Pilipinas (BSP)’s rate hike to 4.50 percent last Thursday.

The central bank now projects full-year 2026 inflation at 6.3 percent—2.3 percentage points above its annual target range and a 4.3-percentage-point increase year-on-year from 2025. Anticipation of broader price hikes and additional policy tightening further dampened sentiment, with more investors adopting a risk-averse stance as the effects of the oil shock continue to unfold.

Trading activity softened, with value turnover at P4.65 billion, reflecting reduced risk appetite. Foreign investors remained on the sidelines, posting net outflows of P677.34 million, underscoring continued capital flight amid global uncertainty.

Sector performance was mixed: mining and oil led gains (+1.96%), supported by elevated global crude prices amid ongoing Middle East tensions, while conglomerates posted the steepest decline (-1.74%), dragging the broader index.

Stock-specific moves reflected defensive positioning amid widespread economic uncertainty. Manila Electric Company (MER) gained 2.18% as utilities benefited from higher power price expectations, while DigiPlus (PLUS) fell 4.58%, reflecting profit-taking and a risk-off rotation away from high-beta names.

On the currency front, the peso also weakened slightly to P60.71 per US dollar from P60.70 previously, continuing to hover near the 61 level. The marginal depreciation reflects a firm US dollar environment, as markets price in prolonged elevated US interest rates alongside sustained safe-haven demand.

Over the past 24 hours, global oil prices remained elevated due to uncertainty in the US–Iran situation and risks to supply through the Strait of Hormuz, increasing import costs for the Philippines and driving dollar demand. Combined with the BSP’s hawkish tone on possible further rate hikes should the conflict persist, geopolitical tensions continue to anchor a risk-off tone, pressuring both equities and the peso at the start of the week.