PSEi snaps losing streak as peso strengthens

The Philippine Stock Exchange Index (PSEi) snapped a five-session losing streak on Friday, rising 95.95 points, or 1.67 percent, to 5,825.97, while the peso strengthened 27 centavos, or 0.43 percent, to P62.465 per US dollar as investors returned to beaten-down assets and geopolitical risks eased.

The PSEi rebound followed Thursday’s 10-month low, with foreign investors turning net buyers at P2.85 billion. All sectors gained, led by Services at 3.22 percent, Financials at 1.51 percent and Mining and Oil at 0.95 percent. ICT rose 3.95 percent to P920, while Semirara Mining and Power Corp. fell 4.50 percent to P15.28.

Investors sought bargains

The advance came as investors sought for bargains amid lingering concerns regarding the country’s economic growth prospects, as well as the broader situation in the Gulf. Investors mostly stayed on the sideline, with net value turnover remaining subdued at P5.21 billion.

The peso opened at P62.65 and traded between P62.46 and P62.75. The BAP weighted average fell to P62.603 from P62.756, while FX turnover jumped to US1.826 billion from US1.145 billion.

The stronger peso came despite a firm dollar, with the dollar index around 101.2-101.3 and US Treasury yields at multi-year highs.

The US 10-year Treasury yield reached 5.196 percent, its highest since 2007, while the 30-year yield hit 5.48 percent, its highest since 2004. Fed funds futures were pricing a 71-percent probability of another rate hike in October, up from about 53 percent earlier in the week.

Volatile oil prices

Oil prices remained volatile amid developments in the US-Iran conflict. Brent rose more than 3 percent Thursday to around $109 a barrel after a Houthi missile attack on Saudi Arabia, before easing as reports emerged that US and Iranian negotiators were exploring a phased path toward reopening the Strait of Hormuz.

By Friday morning, Brent was down about 0.7 percent at $105.85, while WTI fell 0.9 percent to $93.80.