Philippine shares rallied for a second straight trading day Wednesday, closing above the 6,000 level as global political tensions eased.
However, the peso depreciated again, slipping below the 60-level against the U.S. dollar. The local currency closed at 60.10, compared with 59.95 on Tuesday.
The 30-company Philippine Stock Exchange index (PSEi) ended at 6,044.17, up 107.97 points or 1.82 percent. The broader all shares index rose 60.93 points, or 1.85 percent, to close at 3,356.16.
AB Capital Securities said the index staged a relief rally as regional markets rose following reports that Iran received a 15-point ceasefire proposal from the U.S.
All sectors ended in the green, led by mining and oil, which jumped 4.03 percent. Property gained 2.11 percent, while financials advanced 1.93 percent.
Value turnover reached P5.4 billion. Foreign investors turned net buyers, breaking a 14-day selling streak with inflows of P224.7 million.
Market breadth was positive, with gainers leading decliners 118 to 81, while 54 stocks remained unchanged.
Century Pacific Food Inc. was the day’s top index gainer, rising 5.32 percent to P36.65. PLDT Inc. was the worst performer among blue chips, falling 2.96 percent to P1,310.
Oil prices tumbled and stocks rose Wednesday after reports that Washington sent a peace plan to Iran, while Tehran announced it will let “non-hostile” oil vessels through the crucial Strait of Hormuz.
After nearly four weeks of conflict, investors jumped on the first signs that hostilities could wind down, though analysts pointed out that the arrival of more US troops in the Middle East suggested the chance of escalation remained.
The economic impact of the crisis has begun to bite around the world, with governments looking to cut energy consumption.
Both main crude contracts plunged more than six percent — with Brent back below $100 — after US President Donald Trump voiced optimism at ending the war and said officials were “in negotiations right now”. However, both pared the losses as the day wore on.
Speaking to reporters in the Oval Office, Trump said Iran “did something yesterday that was amazing actually. They gave us a present and the present arrived today. And it was a very big present worth a tremendous amount of money.”
“That meant one thing to me — we’re dealing with the right people.”
He did not explain further but said it related to the Strait of Hormuz, through which a fifth of global oil and gas flows and which Iran has largely blockaded, sending global energy prices soaring and fueling fears of another surge in inflation.
The New York Times quoted unnamed officials saying that Washington had sent a 15-point peace proposal via Pakistan.
Israel’s Channel 12 said that Trump was suggesting a one-month ceasefire during which they would discuss handing over Iran’s enriched uranium and banning further enrichment, while Tehran would also ensure safe passage through the Strait of Hormuz.
The Israeli report also said Iran would see an end to all sanctions and receive assistance in developing civil nuclear energy.
– Economic impact –
Meanwhile, Tehran, in a message circulated by the International Maritime Organization, assured safe passage through the strait to “non-hostile vessels”.
Iran already said it was not targeting friendly nations.
Equity traders pounced on the developments, with Tokyo, Seoul, Shanghai, Hong Kong, Sydney, Singapore, Mumbai, Bangkok, Jakarta, Wellington and Taipei all well up.
London, Paris and Frankfurt rose at the open.
An extra boost came from International Energy Agency boss Fatih Birol’s comments that he was “ready to move forward” with an additional release of oil reserves “if and when necessary”.
Pepperstone’s Chris Weston warned that “developments on the ground do not fully support a de-escalation narrative”.
“Reports that the 82nd Airborne Division could deploy around 3,000 troops to the Middle East, alongside discussions around raising the US enlistment age from 34 to 42, point to continued preparation and an increased presence in the region, which in Trump’s thinking could increase the pressure on Iran to forge an agreement in the reported upcoming talks.”
And the economic impact is becoming increasingly clear.
Vietnam raised the price of diesel Wednesday to 39,660 dong ($1.50) per litre, meaning it had more than doubled since the war started.
Data Tuesday showed business activity in the eurozone slowed significantly in March as energy prices surged and global supply chains were hit, while France’s INSEE statistics agency trimmed its growth forecast for the first and second quarters of this year.
Philippine President Ferdinand Marcos declared a state of “national energy emergency”, citing risks to domestic supplies, and Sri Lanka ordered street lights, neon signs and billboard lighting to be switched off.
Bangladesh raised jet fuel prices 79 percent and Ireland slashed the excise duty on petrol and diesel to stem surging prices at filling stations. With AFP
