PSEi snaps 2-day slump on bargain hunting

Local stocks snapped a two-day decline on Monday as bargain hunters returned, although geopolitical tensions and rising bond yields kept investors on edge.

The benchmark Philippine Stock Exchange Index (PSEi) rose 0.22 percent, or 13.26 points, to close at 6,075.07.

Luis Limlingan, head of sales at Regina Capital Development Corp., said investors picked up beaten-down shares following the Bangko Sentral ng Pilipinas’ indication that it could begin easing monetary policy if inflation slows faster than expected.

Still, Limlingan said gains were limited as the ongoing US-Iran conflict weighed on sentiment and prompted investors to remain cautious.

“Overall, market participants remained selective amid lingering geopolitical uncertainty and concerns over economic growth,” Limlingan said.

Ron Acoba, chief investment strategist at Trading Edge, said PSEi’s advance was driven largely by index heavyweight International Container Terminal Services Inc. (ICTSI) and a modest recovery in financial stocks following Friday’s sharp banking selloff.

But Acoba warned that the headline index masked broader weakness in the market.

Rising bond yields continued to pressure the peso, which weakened to another record low against the US dollar.

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External risks also intensified as crude oil prices rebounded following the shutdown of Saudi Arabia’s East-West pipeline and renewed concerns over possible disruptions through the Bab el-Mandeb Strait.

Acoba said investors were also bracing for the possibility of a US Federal Reserve rate hike this week, alongside growing expectations of another increase in December.

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