Investors had feared that escalating hostilities could disrupt oil shipments through the Strait of Hormuz, a key route for roughly one-fifth of global oil trade.
Oil prices retreat
As concerns over supply disruptions eased, oil prices retreated from recent highs, reducing inflation fears among oil-importing economies such as the Philippines and helping lift the benchmark index to its highest level since 6 March.
Trading activity was robust, with value turnover reaching P11.38 billion. Foreign investors were net buyers, posting P1.03 billion in net inflows.
The rally was broad-based, with all major sectors ending in positive territory. Financials led the advance, surging 9.04 percent, followed by Services, Mining & Oil, Holding Firms, Property and Industrials.
BDO top performer
Among index heavyweights, BDO Unibank Inc. emerged as the top performer, jumping 14.36 percent to P133. Only four index constituents finished lower, led by DMCI Holdings Inc., which slipped 2.33 percent to P8.38.
Market breadth was overwhelmingly positive as investors returned to Philippine equities after weeks of geopolitical uncertainty and risk aversion.
Strong peso recovery
The peso likewise posted a strong recovery, closing at P60.48 per US dollar from P61.35 in the previous session. The move represented an appreciation of 87 centavos, or about 1.4 percent, making it one of the currency’s strongest single-day gains in recent months.
During the session, the peso traded between P60.445 and P60.73, while total spot market volume reached US$1.68 billion, according to data from the Bankers Association of the Philippines.
The currency’s strength reflected renewed foreign capital inflows and reduced demand for safe-haven US dollar assets, allowing it to close at its strongest level since 7 May, when it finished at P60.42.
Trade balance improvement
Lower expected energy costs improved the country’s trade balance and help ease pressure on domestic inflation, both of which support the peso. The prospect of softer oil prices also fueled optimism that inflation could continue to moderate, potentially giving the Bangko Sentral ng Pilipinas greater flexibility in monetary policy later this year.
