The Philippine Stock Exchange Index (PSEi) fell sharply for a second straight session on Friday, closing at 5,768.76, its lowest level of the year so far, down 91.18 points or 1.56 percent, while the peso held steady at P61.59 per US dollar as investors continued to reduce risk exposure amid conflicting signals surrounding US-Iran relations and renewed concerns over global growth and energy prices.

The latest close marked the local bourse’s lowest level since 18 November last year, and the lowest close for the market since the Middle East conflict escalated in March.

Trading activity surged, with value turnover reaching P25.78 billion. Analysts noted, however, that the increase was largely driven by the latest Morgan Stanley Capital International index rebalancing, which typically generates substantial one-off institutional flows rather than reflecting broad-based investor conviction.

Foreign investors remained net sellers, recording P6.65 billion in net outflows, the largest daily foreign selling figure in recent sessions.

Sector performance was mixed. Banks led gainers, advancing 0.98 percent as investors favored lenders amid expectations of higher interest rates and defensive positioning. Meanwhile, Services plunged 3.52 percent, dragged down by major index heavyweights.

Among index constituents, ACEN Corp. emerged as the session’s top performer, surging 7.84 percent to P3.30, while Jollibee Foods Corp. led decliners, falling 6.14 percent to P126.90.

Unlike equities, the peso remained relatively stable. The currency closed at P61.59 per US dollar, virtually unchanged from Thursday’s P61.595 finish. During the session, it traded between P61.39 and P61.645 against the greenback, opening at P61.42 before surrendering some intraday gains late in the day.

The peso’s resilience reflected a balance between competing forces. On one hand, geopolitical tensions and elevated oil prices continued to support demand for the US dollar as a safe-haven asset. On the other hand, broader gains in the greenback were capped by uncertainty over whether recent US-Iran military exchanges would escalate into a wider conflict.