BARGAIN hunting could see the stock market post a rebound this week but sustained gains will mainly depend on developments in the Middle East, analysts said.
The benchmark Philippine Stock Exchange index (PSEi) closed Friday at 6,320.41, down 4.41 percent from week on week as US and Israeli strikes on Iran, which retaliated by striking targets across the region, rattled sentiment.
Despite continued uncertainties, analysts said investors could take the opportunity to snap up stocks as the market was now trading at attractive valuations.
“Based on Friday’s close, the market is trading at a price-to-earnings ratio of about 10.6 times, below its historical average of 14.4 times,” said Japhet Tantiangco, research manager at Philstocks Financial Inc.
He added that a strong rally in the near term was unlikely, however, given geopolitical risks.
Investors are also expected to monitor government policy measures aimed at mitigating the economic impact of rising oil prices, as well as the release of additional fourth-quarter and full-year 2025 corporate earnings.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the market could continue to take cues from global developments and the potential effect on oil supply and inflation.
Global oil prices have surged following fears of supply disruptions in the Strait of Hormuz, a key shipping route for crude exports, raising concerns that higher fuel costs could fuel inflation and delay potential interest rate cuts both locally and in the United States.
Ricafort added that investors could also take their cues from economic data releases this week, including January lending and liquidity data on March 9 and jobs figures for the same month on March 13.
Luis Limlingan, head of sales at Regina Capital Development Corp., also said that market sentiment would largely hinge on developments in the Middle East.
“Markets will take cues from developments in Iran. A lot can happen over the weekend until the PSE resumes trading,” he noted.
Technically, analysts said the PSEi could trade in the 6,150 to 6,400 range after breaching key moving averages last week, signaling short-term bearish momentum.