Stocks drop as oil jumps after US-Iran strikes

PHILIPPINE STOCKS continued to decline on Thursday as oil prices jumped after the United States and Iran exchanged fresh attacks, endangering a fragile ceasefire.

The bellwether Philippine Stock Exchange index (PSEi) went down by 0.52% or 31.30 points to close at 5,910.06, while the broader all shares index fell by 0.44% or 14.56 points to end at 3,289.95.

“The local bourse closed in the red as continued attacks in Iran stoked fear and dampened investor sentiment, dragging the index lower. Surging oil prices on heightened geopolitical tensions raised concerns about inflation and economic headwinds. This in turn sparked worries that the central bank may be pressured into raising rates to tame inflationary risks,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

Oil prices jumped on Thursday on the escalation of hostilities between the US and Iran, but later pared gains as traders assessed the actual impact on supply disruptions, Reuters reported.

Tehran declared the Strait of Hormuz closed after the US launched additional strikes against Iran and as President Donald J. Trump vowed even more attacks if no peace deal is secured.

Brent futures rose 8 cents or 0.09% to $93.18 a barrel by 0702 GMT, while US West Texas Intermediate crude climbed 25 cents or 0.28% to $90.28. Both futures gained more than $2 earlier in the session.

Iran’s joint military command announced the closure of the Strait including oil tankers and commercial ships, saying any vessel attempting passage will be shot at.

“PSEi was weak throughout most of the session, falling as much as 1% intraday before paring losses towards the close. Trading activity softened ahead of tomorrow’s holiday. Despite weaker participation, foreigners remained net buyers, with inflows slightly more broad-based…,” AB Capital Securities, Inc. said in a market note. Philippine financial markets are closed on June 12 (Friday) for Independence Day.

Value turnover decreased to P6.65 billion on Thursday with 585.43 million shares traded from the P7.22 billion with 662.06 million issues that changed hands on Wednesday.

Net foreign buying increased P553.61 million from the P469.36 million recorded in the previous session.

Most sector counters closed lower. Financials slid by 1.38% or 25.02 points to 1,779.28; property sank by 1.03% or 18.71 points to 1,781.70; holding firms dropped by 0.76% or 32.33 points to 4,223.66; and industrials fell by 0.35% or 29.37 points to 8,270.77.

Meanwhile, services rose by 0.43% or 13.89 points to 3,187.09, and mining and oil inched up by 1.12 points to 15,667.23.

Market breadth stayed negative as decliners outnumbered advancers, 99 to 75, while 59 names closed unchanged. — Alexandria Grace C. Magno