Stocks pull back as oil prices surge

Philippine stocks pulled back Thursday, with the PSEi falling 17.30 points, or 0.28 percent, to 6,099.23, while the peso weakened 2.2 centavos, or 0.04 percent, to P62.535 per US dollar, as investors took profits following the market’s two-day advance.

Renewed concern

The retreat came amid renewed concern over surging global oil prices and their impact on Philippine inflation, particularly after Brent crude broke above $100 a barrel as fighting around the Middle East and the Strait of Hormuz intensified.

Trading remained active, with turnover reaching P6.85 billion, while foreign investors posted P166.60 million in net inflows.

Mining and Oil was the strongest sector, gaining 2.59 percent as investors favored companies that could benefit from higher commodity prices. Holding Firms fell 1.17 percent, making it the weakest sector. DMC Holdings led index gainers, rising 3.14 percent to P8.22, while DigiPlus Interactive (PLUS) dropped 3.10 percent to P9.06.

Brent crude remained above $100 a barrel

Brent crude remained above $100 a barrel Thursday, with the benchmark trading at around $100.50 and WTI at about $95.58 early in the session. Prices rose after a significant wave of attacks on commercial shipping, with Iran saying it had attacked 10 vessels near the Strait of Hormuz after the United States destroyed five Iranian oil tankers.

Traffic through the waterway, which previously carried roughly one-fifth of global oil and gas supplies, remains substantially below normal.

For the Philippines, the oil surge threatens to further fuel inflation and widen the external deficit. Headline inflation stood at 6.1 percent in August, well above the BSP’s 2–4 percent target, while the merchandise trade deficit widened 34.9 percent year on year to $5.97 billion in July, according to the PSA. Higher oil prices could therefore increase demand for dollars while adding to domestic price pressures.

The peso opened at P62.50 and traded between P62.50 and P62.58 before closing at P62.535. The BAP weighted average was P62.542, with trading volume at about $1.189 billion.

Thursday’s close marked the second consecutive session of peso weakness after Tuesday’s record low of P62.625.

The peso remains vulnerable to higher oil prices, elevated US Treasury yields and persistent inflationary pressures.

The US 10-year yield was around 4.84 percent, while markets were pricing in roughly a 60-percent probability of a Federal Reserve rate hike at its 15–16 September meeting. Higher US yields can bolster demand for dollar assets and weigh on emerging-market currencies.