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Friday, March 29, 2024

Stocks end flat; ICTSI advances

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The stock market closed virtually flat Monday in cautious trading, as investors weighed the new tension in the Middle East after attacks on two Saudi facilities slashed output in the world’s top exporter by half.

The Philippine Stock Exchange Index added 4.58 points, or 0.1 percent, to 7,996.90 on a value turnover of nearly P5 billion. Losers, however, overwhelmed gainers, 131 to 68, with 47 issues unchanged.

International Container Terminal Services Inc., the biggest port operator, advanced 4.4 percent to P137.20, while Aboitiz Power Corp. climbed 3.6 percent to P40.35.

Manila Electric Co., the largest retailer of electricity, rose 2.1 percent to P374, but PLDT Inc., the biggest telecommunications firm, fell 2.4 percent to P1,175.

Oil prices, meanwhile, saw a record surge Monday amid fresh geopolitical fears after Donald Trump blamed Iran and raised the possibility of a military strike on the country.

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Brent futures surged $12 in the first few minutes of business—the most in dollar terms since they were launched in 1988 and representing a jump of nearly 20 percent—while WTI jumped more than $8, or 15 percent.

Both contracts pared the gains as the day wore on but were still up nearly 10 percent.

The surge in crude lit a fire under energy firms, with Hong Kong-listed CNOOC up 7.4 percent and PetroChina 4.3 percent higher. Woodside Petroleum rallied more than four percent in Sydney.

However, airlines took a hit from the prospect of higher fuel costs. Cathay Pacific dropped four percent in Hong Kong, Air China dropped 4.6 percent in Shanghai and Qantas dived more than four percent in Sydney.

Asian stock markets were mostly down after last week’s rally that was fueled by China-US trade hopes, while investors are awaiting a key Federal Reserve policy meeting hoping for another cut in interest rates.

Shanghai was marginally lower after data showed China’s huge economy showed further signs of slowing last month, with retail sales, fixed-asset investment and industrial production all missing forecasts.

Hong Kong sank 0.8 percent after fresh violent protests struck the city at the weekend, while Singapore shed 0.1 percent and Jakarta sank two percent. There were also losses in Mumbai and Wellington. Tokyo was closed for a holiday.

Sydney added 0.1 percent, Seoul gained 0.6 percent and Taipei was 0.7 percent higher.

Oil prices had dropped last week after news that Trump had fired his anti-Iran hawkish national security adviser John Bolton, which was seen as paving the way for an easing of tensions in the region.

“One thing we can say with confidence is that if part of the reason for last week’s fall in oil and improvement in geopolitical risk sentiment was the news of John Bolton’s sacking… and thought this was a precursor to some form of rapprochement between Trump and Iran, then it is no longer valid,” said Ray Attrill at National Australia Bank.

The attack—claimed by Tehran-backed Huthi rebels in neighbouring Yemen, where a Saudi-led coalition is bogged down in a five-year war—hit two sites owned by state-run giant Aramco and effectively shut down six percent of the global oil supply. With AFP

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