PSEi falls to its lowest level in four months, wiping out the year’s gains

THE BELLWETHER INDEX fell to the 6,400 level on Tuesday as investors remained cautious amid the escalating conflict in the Middle East.

The 30-member Philippine Stock Exchange index (PSEi) fell 2.39% or 157.46 points to end at 6,404.97 on Tuesday, while the broader all-stock index rallied 1.96% or 68.26 points retreated to close at 3,409.85.

This was the PSEi’s worst finish in more than four months or since it closed at 6,255.74 on December 13, 2023.

“Philippine stocks saw their biggest sell-off yet as the market reached the 6,400 level and fell 2.4%, spurred by higher yields and increased concerns over escalating tensions in the Middle East caused by the Iranian airstrike on Israel last Saturday,” says Regina. Capital Development Corp. Chief Sales Officer Luis A. Limlingan said in a Viber message.

“The PSEi has now erased most of its gains, ending the session with a performance of -0.7% this year,” Mr Limlingan said.

The index ended at 6,450.04 on December 29, 2023.

Israelis were awaiting word on how Prime Minister Benjamin Netanyahu would respond to Iran’s first-ever direct attack, as international pressure for restraint grew amid fears of an escalation of the Middle East conflict, Reuters reported.

Mr Netanyahu on Monday convened his war cabinet for the second time in less than 24 hours to weigh a response to Iran’s missile and drone attack this weekend, a government source said.

Military Chief of Staff Herzi Halevi said Israel would respond. He gave no details.

The prospect of Israeli retaliation has alarmed many Iranians who have been enduring economic pain and tighter social and political controls since the 2022-2023 protests.

“With Tuesday’s decline, the stock market has now fallen nine days in a row, which is the longest losing streak since October 2016,” Philstocks Financial, Inc. said. Research and Engagement Officer Mikhail Philippe Q. Plopenio in a Viber message.

“The ongoing sell-off was due to rising tensions in the Middle East and concerns over possible delayed rate cuts by the BSP (Bangko Sentral ng Pilipinas) amid upside risks to inflation,” Mr Plopenio added.

All sectoral indices ended in negative territory. Services lost 3.26% or 60.29 points to close at 1,784.33; industry and services fell by 2.73% or 235.64 points to 8,367.23; holdings fell 2.42% or 147.12 points to 5,930.69; financial services fell 1.64% or 32.93 points to 1,973.55; real estate fell by 1.59% or 40.53 points to 2,502.24; and Mining and Oil fell 1.35% or 112.83 points to 8,198.40.

Value turnover rose to P7 billion on Tuesday with 15.82 billion issues changing hands, up from P5.58 billion with 612.72 million shares traded on Monday.

Fallers overwhelmed the front runners, 154 to 41, while 45 names finished unchanged.

Net foreign sales rose to P1.19 billion on Tuesday from P304.76 million on Monday. — RMDO of Reuters