PSEi falls as EU agrees to Russian oil embargo

SHARES fell on Tuesday as global oil prices rose after the European Union (EU) announced it would cut oil imports from Russia by 90% by the end of this year.

The Philippine Stock Exchange (PSEi) benchmark index fell 47.64 points, or 0.69%, to close at 6,774.68 on Tuesday, while the broader all-shares index fell 26.16 points, or 0.72%, to 3,606 .91 fell.

“The local market retreated this Tuesday as investors took profits from the previous four-day rally. The increase in oil prices, caused by the EU’s decision to cut 90% of its Russian crude oil imports by the end of the year, contributed to the decline,” said Japhet Louis O. Tantiangco, senior research analyst at Philstocks Financial, Inc., in a Viber message.

“Oil prices rose to a two-month high as traders waited on whether the EU would reach an agreement to ban Russian oil ahead of a meeting on a sixth package of sanctions against Moscow over its invasion of Ukraine,” Regina Capital Development Corp said. Added Head of Sales Luis A. Limlingan in a Viber message.

European Union leaders handed concessions to Hungary to agree an oil embargo on Russia over its invasion of Ukraine, and early Tuesday morning sealed a deal aimed at blocking 90% of Russia’s crude oil imports into the bloc end of the year, Reuters reported.

The embargo – which will become law in the coming days – will hit sea shipments of Russian oil and include most imports from Russia once Poland and Germany stop buying it by the end of 2022, which diplomats and officials from both countries have said is now government policy.

Oil prices extended gains on Tuesday after the EU agreed to cut oil imports from Russia, raising concerns about a tighter market already weighing on supply due to rising demand ahead of the summer peak season in the US and Europe was excited.

US West Texas Intermediate crude oil traded at $119.12 a barrel, up $4.05 or 3.5% from Friday. Due to a US public holiday, there was no settlement on Monday. Both benchmarks have recorded daily gains since Wednesday.

Cristina S. Ulang, First Metro Investment Corp.’s head of research, said in a Viber message that the market corrected slightly after the full implementation of the MSCI rebalancing.

The majority of industry indices ended lower except for Financials, which was up 20.29 points or 1.23% to 1,658.62, and Mining and Oil, which was down 22.23 points or 0.18% to 11,920.22 gained.

Meanwhile, services declined 35.66 points, or 1.87%, to 1,870.55; real estate fell 43.90 points, or 1.41%, to end at 3,049.62; Industrials fell 100.87 points, or 1.06%, to 9,351.59; and holding companies shrank 15.83 points, or 0.25%, to 6,291.16.

Relegated defeated promoted, 113 to 76, while 48 names ended unchanged.

Value turnover rose to 35.71 billion pesos, with 2.17 billion shares changing hands, from 7 billion pesos with 890.17 million issues recorded the previous trading day.

Foreigners became sellers on Tuesday with net sales of 232.01 million pesos versus Monday’s net purchases of 69.01 million pesos. — LMJC Jocson With Reuters