The Philippine Stock Exchange index (PSEi) suffered a significant decline on Wednesday, as investor optimism over a potential peace agreement between the United States and Iran waned. The benchmark index fell by 1.2%, or 89.45 points, closing at 7,234.56, its lowest level in two weeks.
Market analysts attributed the downturn to renewed geopolitical tensions in the Middle East, following statements from US officials suggesting that diplomatic progress with Iran had stalled. The prospect of a thaw in relations had earlier buoyed regional markets, but fading hopes have now reversed those gains.
"The market was pricing in a positive outcome from the US-Iran talks, but recent developments have dampened that sentiment," said Ricardo Cruz, head of research at a local brokerage. "Investors are now returning to a risk-off mode, which is reflected in today's sell-off."
Losses were broad-based, with all 10 sector indices ending in the red. Property and financial stocks were among the hardest hit, with SM Prime Holdings and BDO Unibank both dropping over 2%. Meanwhile, energy stocks also declined, despite a slight uptick in global oil prices.
Trading volume was below average, with only 1.2 billion shares worth ₱7.8 billion changing hands. Foreign investors were net sellers, pulling out ₱567 million from the local bourse.
Analysts expect the PSEi to remain volatile in the near term, as investors continue to monitor geopolitical developments and the upcoming release of US inflation data. "Unless there is a clear catalyst, the market may trade sideways with a downward bias," Cruz added.