PSEi plunges below 7,000 as oil prices surge

The Philippine Stock Exchange index (PSEi) suffered its biggest drop in 20 months to crash below the 7,000 level after a major hike in pump prices took effect coupled with reports of an even bigger increase next week.

The main index fell 310.34 points or 4.26 percent to close at 6,977.73 as banks led the retreat. Mining stocks escaped the bloodbath as rising metal prices boosted the sector.

Philippine Stock Exchange index (PSEi)
Philippine Stock Exchange index (PSEi)

This is the biggest single day loss for the bourse since June 15, 2020 when the PSEi fell 312.42 points or 4.82 percent.

Volume rose to 2.35 billion shares worth P12.16 billion as losers swamped gainers 178 to 57 with only 21 unchanged.

“Philippine stocks plunged yet again on worries that the rising energy prices caused by the Russia-Ukraine war would slow the economy and drive inflation hotter,” said Regina Capital Development Corporation Managing Director Luis Limlingan.

He added that, “Apart from monitoring the potential economic ramifications of disruptions in the global energy supply, investors also await the release of the Feb. CPI release on Thursday.”

AB Capital Securities said “The Philippine stock market tumbled after a third round of peace talks between Russia and Ukraine failed to produce any substantial agreements.”

Oil prices traded above $130 per barrel, its highest price since 2008, stoking inflation fears around the world.

Philstocks Financial Senior Supervisor for Research Japhet Tantiangco said “The local market fell further as investors continued to worry over the possible imposition of sanctions on Russia’s oil exports. The said move is expected to lead to a surge in oil prices which would cause inflationary pressures.”

He added that, “The depreciation of the Peso below the 52.00 per US Dollar level also added to the bearish sentiment.”

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