Local equities market halted its downward trajectory, staging a recovery after the United States (US) and Iran signed the preliminary accord aimed at a permanent peace agreement, but gains were severely capped after the central bank went ahead with an expected interest rate increase, prompting investors to scale back positions in rate-sensitive industries.
The Philippine Stock Exchange index added 38.85 points, or 0.64 percent, to settle at 6,153.66 on Thursday, June 18. The broader equity market showed deep division among sector amid tug-of-war between macroeconomic relief and local monetary tightening.
The Services index spearheaded the advances, while the Mining and Oil counter endured the steepest decline of the session.
Market liquidity thinned significantly during the session as trading volume dropped to 447 million shares, with transactions valued at ₱7.15 billion. Decliners also outnumbered advancers 100 to 82, while 56 issues closed unchanged.
“The Philippine market ended in positive territory, recovering from yesterday’s broad-based sell-off, supported by improved investor sentiment following reports of a peace deal between the US and Iran,” said Luis Limlingan, head of sales at Regina Capital Development Corp.
While buyers dominated the morning tape, the upward momentum began eroding as the afternoon session progressed. Selective profit-taking intensified across the board after the Bangko Sentral ng Pilipinas indicated it would maintain its restrictive monetary posture.
The central bank’s decision to continue its rate-hiking cycle forced money managers to reassess corporate valuations under higher borrowing costs.
The diplomatic breakthrough between Washington and Tehran carries heavy weight for the import-dependent Philippine economy. The memorandum of understanding includes an agreement to reopen the strategic Strait of Hormuz for a minimum of 60 days. This key maritime corridor is vital for global energy logistics, and its reopening is expected to cool volatile global oil prices.
“The local market bounced back as the US and Iran signed a memorandum of understanding with a goal of moving toward a permanent peace deal,” said Japhet Tantiangco, research manager at Philstocks Financial Inc.
He noted that the temporary resolution at the Strait of Hormuz is projected to alleviate global oil supply constraints, which will subsequently soften the domestic inflation outlook.
No comments:
Post a Comment