The PSEi lost as much as 2.8 percent following declines across most sectors led by holding firms, industrials, and services. Stocks partially recovered to 6,490.73 before the noontime close, still down by 1.8 percent.
Jonathan L. Ravelas, veteran forecaster and senior adviser at Reyes Tacandong & Co.,said the market reaction to the US-Iran escalation appeared to be a knee-jerk move similar to last year’s brief June conflict.
The confrontation could remain short-lived but he also warned it could become prolonged depending on whether Iran’s new leadership moves to de-escalate with the United States.
For now, Ravelas sees strong areas of support for the PSEi at 6,150–6,000.
Big picture
Ravelas said fresh geopolitical worries add to lingering confidence issues at home, which were weighed down by corruption concerns and inflation risks.
“I think what is important now is really [for the Bangko Sentral ng Pilipinas] to anchor the inflation expectations,” Ravelas told InsiderPH.
The administration also has the challenging task of rebuilding investor confidence, which could help calm markets alongside targeted monetary policy measures.
“You can lead the horse to the water but you can’t force it to drink,” he said.
Oil stocks rally
The selloff followed a surge in crude prices after fresh Middle East attacks raised fears of supply disruption along key Gulf shipping routes.
Mining and Oil was the only sector to advance, up 0.73 percent, as higher oil prices improved the outlook for energy-linked companies.
Petron Corp., backed by San Miguel Corp., surged nearly 9 percent to P3.06, while Shell Pilipinas Corp. traded as high as P12.46, up 8.3 percent. Cebu-based Top Line Business Development also jumped as much as 6.45 percent to P1.65 per share.
Airline stocks slump
Cebu Air, operator of Cebu Pacific, tumbled as much as 8.4 percent to P34.70, while Philippine Airlines operator PAL Holdings lost over 4 percent to P3.66.
Aviation fuel accounts for the largest share of the industry’s operating costs.
PAL affiliate MacroAsia Corp., an aviation services firm, lost as much as 7.3 percent to P4.33 each on Monday.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
