Shares slip as market weighs BSP hike, ME war

PHILIPPINE SHARES declined further on Thursday on concerns over the Middle East (ME) conflict, with the Bangko Sentral ng Pilipinas (BSP) also delivering a rate hike to quell growing inflation pressures as the war continues to push up prices.

The Philippine Stock Exchange index (PSEi) slipped by 0.09% or 5.75 points to close at 5,983.81, while the broader all shares index went down by 0.19% or 6.40 points to end at 3,369.72.

“The Philippine market ended slightly lower as the central bank’s rate hike weighed on sentiment, keeping risk appetite for equities remained subdued. This is still further pressured by ongoing uncertainty in the Middle East, keeping investors cautious and limiting overall market participation,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“The local market extended its decline as investors continue to worry over the outlook of the situation between the US and Iran. This comes as the two remain without a deal that could end their war. Investors also traded cautiously while waiting for the BSP’s policy decision,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

On Thursday, the BSP raised benchmark interest rates by 25 basis points in a preemptive move to mitigate second-round inflation effects from the Middle East warm bringing the policy rate to 4.5%. This was its first hike since October 2023 and was predicted by 11 of 19 analysts in a BusinessWorld poll.

BSP Governor Eli M. Remolona, Jr. also signaled further tightening ahead as they now see inflation breaching their 2%-4% tolerance band until next year.

Sectoral indices were mixed. Services rose by 0.41% or 11.40 points to 2,770.13; property increased by 0.13% or 2.66 points to 1,989.10; and holding firms went up by 0.07% or 3.24 points to 4,631.91.

Meanwhile, mining and oil declined by 1.39% or 252.50 points to 17,808.34; financials dropped by 1.13% or 21.37 points to 1,867.2; and industrials went down by 0.32% or 28.96 points to 8,789.35.

Decliners beat advancers, 102 to 92, while 62 names were unchanged.

Value turnover declined to P5.74 billion on Thursday with 4.03 billion shares traded from the P5.96 billion with 2.86 billion issues that changed hands on Wednesday.

Net foreign selling increased to P597.74 million from P497.60 million in the previous session.

Asian shares retreated from record highs on Thursday as oil prices extended their gains on renewed shipping woes in the Gulf, underscoring fragile risk sentiment as a peace deal eludes the US and Iran, Reuters re-ported.

Iran on Wednesday captured two container ships seeking to exit the Gulf via the Strait of Hormuz, tightening its grip on the crucial waterway, as investors watch if the fragile ceasefire in the Middle East will hold. — A.G.C. Mag-no