The Philippine Stock Exchange Index (PSEi) retreated to begin the truncated trading week, closing at 5,879.41, down 58.97 points or 0.99 percent from Friday’s 5,938.38, while the peso also weakened to P61.69 per US dollar from P61.47 previously as investors reacted negatively to reports of renewed exchanges between the US and Iran.

Risk sentiment deteriorated as fresh military action involving Iran and the United States reignited concerns over energy supply disruptions and the broader economic impact of elevated oil prices, which rose by around 3 percent following reports of the strikes.

Subdued trading activity

Trading activity remained subdued, with total value turnover reaching P5.57 billion, below recent averages, while foreign investors were net sellers, recording net outflows of P754.31 million, indicating continued caution among overseas funds.

Market weakness was broad-based, with all major sectors finishing in the red, led by Mining & Oil, which plunged 4.04 percent, reflecting volatility in commodity markets and concerns that higher energy costs could weigh on global growth.

Only six PSEi constituents posted gains, underscoring the defensive tone of trading. Meralco (MER) emerged as the top index gainer, rising 1.44 percent to P564.00, while DigiPlus Interactive Corp. (PLUS) was the session’s worst performer, falling 6.04 percent to P9.96.

Market breadth was decisively negative, with 123 decliners against just 47 advancers, while total trades reached 46,954.

Peso weakens vs U.S. dollar

The Philippine peso likewise weakened against the US dollar, closing at P61.69 from Friday’s P61.47 finish, reflecting renewed dollar demand amid the latest exchange of strikes.

Monday’s dip represented a depreciation of 22 centavos, or approximately 0.36 percent, making it the currency’s weakest close in nearly a week.

The local currency opened at P61.495, traded as strong as P61.48, but steadily weakened throughout the afternoon to touch an intraday low of P61.735 before settling at P61.69.

The deterioration was also reflected in the AM weighted average of P61.652, significantly weaker than Friday’s P61.524, while the PM weighted average softened further to P61.694, indicating persistent dollar demand throughout the session. The BAP weighted average rose to P61.668 from P61.507, confirming the broader weakening trend.

Mirroring developments in global currency markets

The peso’s decline mirrored developments in global currency markets. Safe-haven demand for the US dollar increased as investors reassessed geopolitical risks stemming from the latest US-Iran confrontation.

At the same time, crude oil prices moved higher, with Brent crude, the international benchmark, rising nearly 3 percent to $95.99 per barrel, while US benchmark West Texas Intermediate gained more than 3 percent to $93.30 per barrel in Asian trading as markets priced in the possibility of disruptions to Middle East energy flows.