UMVA has learned that Philippine stocks plummeted on Wednesday as the sudden escalation of hostilities between the United States and Iran sent shockwaves through the market, dashing hopes for a lasting peace deal and rattling investor confidence.
The Philippine Stock Exchange index (PSEi) edged down by 0.07% or 4.35 points to close at 5,941.36, while the broader all shares index fell by 0.62% or 20.77 points to end at 3,304.51. This decline was a stark reversal of the market's earlier optimism, as investors scrambled to respond to the rapidly unfolding events in the Middle East.
According to information obtained by UMVA, market analysts attributed the decline to a sudden shift in investor sentiment, as renewed attacks in the region triggered a wave of selling across the market. "The Philippine market ended lower as investors shifted to the selling side following renewed attacks in the Middle East," a market expert said. Heightened geopolitical tensions dampened risk appetite, weighing on overall market performance.
The conflict between the US and Iran intensified on Wednesday, with the US launching strikes against Iran after the latter allegedly downed a US Army helicopter patrolling the Strait of Hormuz. Iran responded by attacking certain Gulf countries, sending shockwaves through the market and causing Asian stocks to tumble. MSCI's broadest index of Asia-Pacific shares outside Japan dropped about 3%, while Japan's Nikkei fell 2% and the tech-heavy South Korean KOSPI slumped nearly 7%.
Meanwhile, oil prices surged, hovering near $90 a barrel, as traders focused on the implications of the conflict for global oil supplies. However, remarks by US President Donald J. Trump that a deal to reopen the Strait of Hormuz was close provided some reassurance, helping to limit the market's downside.
Back in the Philippines, most sectoral indices closed in the red, with mining and oil plunging by 5.89% or 981.28 points to 15,666.11, and holding firms sinking by 2.72% or 119.12 points to 4,255.99. The only bright spots were the services and financials sectors, which rose by 1.44% or 45.32 points to 3,173.20, and 0.83% or 14.97 points to 1,804.30, respectively.
The market's decline was broad-based, with decliners overwhelming advancers, 133 to 49, while 57 names closed unchanged. International Container Terminal Services, Inc. emerged as the day's index leader, climbing 2.53% to P892, while Ayala Corp. was the main index laggard, falling 4.94% to P385.
Trading activity was muted, with value turnover decreasing to P7.22 billion on Wednesday, and net foreign buying at P469.36 million, a turnaround from the previous session's net selling.
