THE stock market will likely remain under pressure this week, analysts said, with the benchmark index likely to test key support levels as investors remain cautious amid the ongoing war in the Middle East.
The Philippine Stock Exchange index (PSEi) fell below the psychological 6,000 support level last week, closing at 5,972.83 on Friday and down 0.76 percent week on week. It has fallen 9.66 percent over the past 30 days and is 1.32 percent lower since the start of the year.
Online brokerage 2TradeAsia.com said risk aversion persisted as markets grappled with the US-Iran war, elevated oil prices, and rising inflation expectations.
It also noted that prolonged conflict was continuing to embed a large risk premium in crude, creating a sustained “risk-off” environment and pressuring local investors to remain on the sidelines.
Philstocks Financial Inc. research manager Japhet Tantiangco, meanwhile, said: “Last week, the local market extended its decline to a fourth straight week as worries over the US/Israel-Iran war continue to dominate sentiment.”
Despite the decline, valuations were said to be increasingly attractive as the PSEi was trading at around 10.1 times price-to-earnings, below its five-year average of 14.4 times and the regional average of 17.8 times.
Analysts said focus should be on companies with strong pricing power and balance sheets to navigate rising costs and persistent volatility.
