US-Iran Peace Deal Boosts Stocks, Peso
“The development triggered strong buying pressure, making the local index one of the top gainers in the region,” Luis Limlingan of Regina Capital said.
Financial markets rallied on Monday, June 15, as investors cheered reports of a peace deal between the United States and Iran, sending stocks soaring above the 6,200 level and boosting the peso to its strongest finish in more than a month.
The Philippine Stock Exchange index (PSEi) kicked off the week on a high note, surging by 6.14 percent or 362.82 points to close yesterday’s session at 6,272.88.
Significant gains were likewise recorded by the broader All Shares index, which soared by 4.39 percent or 144.40 points to 3,434.35.
AB Capital Securities said the PSEi staged one of its strongest rallies in years as investors aggressively priced in easing geopolitical risks, lower oil prices and a less threatening inflation outlook.
It said foreigners turned decisive buyers with over P1 billion net inflow.
Luis Limlingan of Regina Capital, for his part, said the local bourse ended significantly higher after the US and Iran reached an agreement and announced the end of the Strait of Hormuz blockade, easing geopolitical concerns.
“The development triggered strong buying pressure, making the local index one of the top gainers in the region,” he said.
Limlingan said improved risk sentiment also supported the peso, leading to appreciation against the greenback.
Trading was strong as total turnover value reached P12.76 billion to start the week.
Meanwhile, the peso closed at 60.48 against the greenback, stronger by 87 centavos from its 61.35 finish on June 11, the last trading day before the Independence Day holiday.
It marked the strongest finish in more than a month or since May 7, when the peso closed at 60.42 per dollar.
SM Investments Corp. group economist Robert Dan Roces said the peso could strengthen further if markets continue to unwind the geopolitical risk premium.
