The peso and the local stocks plunged Wednesday as escalating world crude prices due to Iran-Israel war caused worries among investors.
The peso closed at 56.98 against the US dollar, down from 56.7 on Tuesday.
The 30-company Philippine Stock Exchange index fell 31.76 points or 0.50 percent to 6,337.43 while the broader all shares index declined 11.07 points or 0.29 percent to 3,772.79.
Analysts said the market continues to face pressure from global rate uncertainties and cautious investor sentiment.
“Many investors are staying on the sidelines, waiting for stronger catalysts before taking positions. Volume remain thin, reflecting the ongoing wait-and-see approach,” said online finance platform Investagrams.
Likewise, investors are awaiting the outcome of policy meeting by the Bangko Sentral ng Pilipinas (BSP).
“Locals remained on the sidelines as they await the latest meeting of BSP, with manny forecasting a rate cut, hoping to ease fears of further conflict escalation in the Middle East,” Regina Capital Development Corp. head of sales Luis Limlingan said.
Among the indices, only the industrial sector ended in green, rising by 0.45 percent. Financials went down by 171 percent while mining and oil declined 1.55 percent.
Value turnover totaled P4.9 billion.
Shares of Manila Water Co. Inc jumped 1.32 percent to P38.40 per share.
On the other hand, the stock price of Bloomberry Resorts Corp. dipped by 4.76 percent to P5.60 each.
Oil prices slipped Wednesday following the previous day’s surge but investors remained on edge fearing a US intervention in the Israel-Iran conflict after Donald Trump called for Tehran’s “unconditional surrender”.
Iran and Israel exchanged missile strikes for a sixth day, with the US president’s latest comments appearing to dent hopes that the crisis in the Middle East could be calmed.
Leaving the G7 summit in Canada a day early on Monday, Trump said he was aiming for a “real end” to the conflict, not just a ceasefire.
He later shared a series of social media posts that stoked speculation he could be planning to join Israel in its strikes on Iranian military and nuclear sites.
Days after a senior US official said Trump had told Israel to back down from plans to assassinate top leader Ayatollah Ali Khamenei, Trump looked to reverse course.
“We know exactly where the so-called ‘Supreme Leader’ is hiding. He is an easy target, but is safe there — We are not going to take him out (kill!), at least not for now,” he wrote on his Truth Social platform.
Warning Iran against targeting US interests, he also posted: “But we don’t want missiles shot at civilians, or American soldiers. Our patience is wearing thin.”
And in a later post wrote: “UNCONDITIONAL SURRENDER!”
The comments sent oil prices spiking more than four percent Tuesday on fears an escalation of the conflict could hammer supplies from the crude-rich region.
But while both main contracts slipped Wednesday, investors remain on edge over any negative developments.
Of particular concern is the possibility of Iran shutting off the Strait of Hormuz, through which around an estimated fifth of global oil supply traverses, according to a Commerzbank note.
“Iran is reportedly ready to target US regional bases should Trump greenlight strikes on Iranian nuclear facilities,” said Stephen Innes at SPI Asset Management. With AFP
“Washington’s refuelling jets are already en route, and if Fordow gets hit, expect the Strait of Hormuz to become a maritime minefield, Houthi drones to swarm Red Sea shipping lanes, and every militia from Basra to Damascus to light up American forward outposts.”
Equity markets Hong Kong, Sydney, Singapore, Mumbai, Wellington, Bangkok, Manila and Jakarta all sank, though Tokyo, Seoul and Taipei edged up.
London gained in the morning even as data showed UK inflation slowed less than expected in May.
Paris and Frankfurt also rose.
The mixed day in Asian stocks followed a weak day on Wall Street, where a below-forecast reading on US retail sales for May — dragged by a slowdown in auto sales — revived fresh worries about the world’s top economy. That came as another report showed factory output fell unexpectedly.
Still, they did provide a little hope the Federal Reserve will eventually cut interest rates, with traders betting on two by the end of the year, according to Bloomberg News.
Investors will be keeping track of the bank’s latest meeting as it concludes later in the day, with most observers predicting it will stand pat.
However, it is also due to release its rate and economic growth outlook for the rest of the year, which are expected to take account of the impact of Trump’s tariff war.
“The Fed would no doubt be cutting again by now if not for the uncertainty regarding tariffs and a recent escalation of tensions in the Middle East,” said KPMG senior economist Benjamin Shoesmith. With AFP
