Market, peso fall as optimism wanes

The Philippine Stock Exchange index (PSEi) slipped 14.87 points, or 0.25 percent, to close at 5,971.98, as investor sentiment weakened amid fading optimism over a possible US-Iran peace agreement.

The market retreated yesterday after reports that Washington rejected Tehran’s latest counterproposal, while US President Donald Trump this morning warned that the ceasefire situation was “weakening,” reviving fears of prolonged geopolitical tensions in the Middle East. Rising global crude prices resulting from the latest bout of uncertainty further dampened sentiment, particularly for import-dependent economies like the Philippines.

Trading activity remained subdued, with net value turnover at P6.33 billion, slightly below the year-to-date average of P6.35 billion. Foreign investors stayed cautious, registering net outflows of P107.55 million. This reflected persistent investor apprehension linked to developments in the Middle East and the broader global energy shock.

Sector performance was mixed, with Mining & Oil leading gains with a 2.09-percent advance as energy prices climbed, while Industrials declined 1.56 percent. Among index names, Aboitiz Equity Ventures (AEV) rose 3.63 percent to P29.95, while Jollibee Foods Corporation (JFC) plunged 10.67 percent to P144.00, becoming the session’s biggest laggard.

Meanwhile, the peso weakened further to P61.48 per US dollar, depreciating by 33 centavos from yesterday’s P61.15 close, as global investors rushed back into the US dollar amid escalating geopolitical risks and renewed fears of prolonged disruptions in Middle East oil supply.

Sentiment deteriorated after hopes for a durable US-Iran ceasefire faded once again. Reports indicated that negotiations between Washington and Tehran had stalled, while renewed threats around the Strait of Hormuz pushed Brent crude back above the $100-per-barrel level.

The move was also part of a broader selloff across Asian currencies. Reports said the Indian rupee hit another record low, while the Indonesian rupiah and Philippine peso remained among the region’s weakest currencies because oil-importing economies are among the most exposed to the ongoing Iran conflict. Safe-haven demand once again lifted the US dollar index as investors priced in the possibility that elevated energy prices could keep US inflation high and delay Federal Reserve rate cuts.

Analysts have noted that despite expectations of additional tightening by the Bangko Sentral ng Pilipinas (BSP) this year, the peso remains vulnerable because rising crude costs are offsetting the support normally provided by higher interest rates.