The Philippine Stock Exchange Index (PSEi) fell 35.50 points, or 0.56 percent, to 6,261.80, while the peso weakened 4.5 centavos to P61.495 per US dollar on Monday, as the local market opened the week on a cautious note amid geopolitical tensions and softer domestic sentiment.

The PSEi was dragged by a lack of fresh domestic catalysts and renewed risk aversion tied to the Middle East conflict. Trading was relatively light at P3.91 billion, while foreign investors posted P222.44 million in net outflows, signaling continued caution from offshore funds.

Mixed performance

Sector performance was mixed, with Mining & Oil leading gains at 3.40 percent on higher crude prices, while Services fell 1.48 percent, the weakest sector.

Stock-specific moves were also evident, with Jollibee Foods Corp. rising 2.90 percent to P159.50, while Ayala Corp. dropped 3.13 percent to P495.00, weighing on the index. Overall, the market reflected rotation rather than broad liquidation, with investors favoring commodity-linked names over rate-sensitive and domestic plays.

The peso weakened slightly to P61.495 per US dollar from P61.45, a 4.5-centavo or 0.07 percent depreciation. The currency traded in a tight range between P61.465 and P61.60, opening at P61.55 before settling near the middle of its band. The Bankers Association of the Philippines weighted average rose to P61.539 from P61.41, while FX turnover eased to about $1.19 billion from $1.42 billion, indicating thinner but steady dollar demand.

The peso’s weakness was driven primarily by external risk factors rather than a broadly stronger dollar. Prevailing tensions in the Middle East, particularly around the Strait of Hormuz, kept oil prices elevated and supported dollar demand.

Sharply reduced traffic through Strait of Hormuz

Reports of sharply reduced vessel traffic through the strait and continued uncertainty over US-Iran negotiations reinforced fears of prolonged supply disruptions. Brent crude remained near $89 per barrel, keeping global energy markets on edge.

Weaker economic momentum

On the domestic side, slowing remittance growth and weaker economic momentum added to the cautious tone.

While June remittances hit $3.04 billion — the highest monthly level so far this year — growth slowed to its weakest pace in more than four years, signaling softer incremental dollar inflows.