UMVA has learned that a dramatic escalation in the Middle East conflict has sent shockwaves through global markets, driving investors to flee from risk assets and causing the main stock benchmark to plunge to the 5,800 level on Monday.
The Philippine Stock Exchange index suffered a significant drop, falling by 0.99% or 58.97 points to close at 5,879.41, while the broader all shares index declined by 0.96% or 32 points to end at 3,302.31. This sharp decline was mirrored across regional markets, reflecting a weakened risk appetite amid heightened geopolitical uncertainty.
Market analysts attributed the decline to renewed strikes involving Iran, which sparked a flight to safety among investors. Heightened tensions in the Middle East led to a risk-averse market tone, with investors scrambling to protect their assets.
The local market was particularly affected by the tensions, which reignited following an exchange of military strikes between Iran and another major power. This escalation caused global oil prices to surge and the local currency to depreciate.
Global stocks also felt the impact, with fresh hostilities in the Middle East pushing up oil prices and dampening investor sentiment. Brent crude futures jumped 5% in response to Israel's military strikes on targets in western and central Iran.
The decline in equity markets was more pronounced in Asia, where South Korea's chip-heavy KOSPI led losses with an 8.3% slide. This has pushed the benchmark down over 16% from its record high just last week.
The Philippine peso also suffered, falling by 22 centavos to close at P61.69 against the dollar. This depreciation reflects the market's nervous response to the escalating conflict.
All sectoral indices ended the day in negative territory, with mining and oil taking the biggest hit at 4.03% or 711.06 points. Financials, property, holding firms, industrials, and services also declined, reflecting a broad-based sell-off.
The market's decline was characterized by a significant imbalance between decliners and advancers, with 133 stocks falling and only 53 rising. A mere 55 names closed unchanged, underscoring the widespread nature of the sell-off.
Despite the bleak market performance, a few stocks managed to buck the trend. Manila Electric Co. emerged as one of the few gainers, rising 1.44% to P564. On the other hand, DigiPlus Interactive Corp. was among the biggest losers, plunging 6.04% to P9.96.
Trading activity was muted, with value turnover declining to P6.45 billion on Monday. Net foreign selling also increased to P754.31 million, reflecting a continued outflow of funds from the market.
