The benchmark Philippine Stock Exchange Index (PSEi) closed at 5,911.93, down 0.69 percent, snapping a three-day winning streak as investors locked in profits, while the peso appreciated sharply to P61.62 per US dollar from P61.74 previously.

Equity investors took profits following the market’s three-day surge and turned more cautious amid renewed geopolitical tensions in the Middle East.

Market sentiment was weighed down by reports that Israeli Prime Minister Benjamin Netanyahu reiterated that Israel and the United States remained prepared to take further action against Iran if necessary, reviving concerns that regional tensions could escalate and disrupt global energy supplies. 

Investors trim risk exposure

These developments prompted investors to trim risk exposure after the market’s recent rebound.

Trading activity softened, with value turnover reaching P6.14 billion, while foreign investors remained net sellers with P298.93 million in net outflows.

Sector performance was broadly negative. Financials bucked the trend, rising 1.29 percent on expectations that a higher-for-longer interest rate environment could continue to support bank margins. Meanwhile, Services fell 2.23 percent, reversing much of the previous day’s strength. Property, Holding Firms, Industrials, and Mining & Oil also ended lower.

Century Pacific Food Inc. (CNPF) led index gainers, climbing 4.37 percent to P26.30, while Ayala Land Inc. (ALI) was the session’s biggest laggard, dropping 4.76 percent to P14.00.

Local currency strengthened

Meanwhile, the peso strengthened to P61.625 per US dollar from P61.745 previously, appreciating by 12 centavos, or about 0.19 percent. 

The move was evident early in the session, with the Bankers Association of the Philippines weighted average at P61.644, stronger than the previous day’s close. 

Throughout the day, the currency continued to recover, reaching an intraday high of P61.545 per US dollar before settling at P61.625.

The US dollar softened from intraday highs as some traders bet that tensions would not escalate into a major disruption of Middle East oil flows. 

Positive market response

Markets also responded positively to reports that the US Congress was seeking to limit further military escalation with Iran, reducing worst-case geopolitical scenarios.

In regional foreign exchange markets, the Japanese yen strengthened by roughly 0.3 percent to around ¥159.2 per US dollar from about ¥159.7, while the South Korean won gained approximately 0.4 percent to around ₩1,382 per US dollar from ₩1,388. The Thai baht also appreciated by about 0.2 percent to around ฿36.3 per US dollar, indicating a modest recovery among Asian currencies after several sessions of risk-off trading.

Oil prices decline

Oil prices retreated from recent highs, with Brent crude falling about 0.8 percent to around US$97 per barrel following reports of a ceasefire agreement between Israel and Lebanon, easing fears of a wider regional conflict.

The peso’s 12-centavo appreciation outpaced gains recorded by many of its regional peers, making it one of the stronger-performing Asian currencies during the session despite continued uncertainty surrounding global risk sentiment.