PHILIPPINE stocks may trade sideways with a cautious bias this week as the ongoing war in the Middle East and profit-taking continue to weigh on investor sentiment, analysts said.
The Philippine Stock Exchange index (PSEi) fell 1.62 percent week-on-week to 5,999.13, slipping back below the 6,000 level as gains from earlier ceasefire developments were offset by selling pressure toward the end of the week.
Online brokerage 2TradeAsia.com said the market retreated as investors remained wary of risks stemming from the prolonged war.
“Investors remained concerned over heightened risks from an uncertain geopolitical terrain,” it said, noting that most sectors declined, led by holdings and property stocks.
The brokerage added that global markets continue to grapple with the US-Iran standoff, with disruptions in the Strait of Hormuz keeping energy prices elevated and limiting risk appetite.
It warned that the lack of a clear resolution to the war could keep markets in a volatile range, as investors price in a prolonged “war premium” on oil.
Locally, the economic impact could be significant, with authorities estimating that hundreds of billions of pesos may be needed for crisis response should the war persist, potentially widening the fiscal deficit and adding pressure on the peso.
Philstocks Financial Inc. research manager Japhet Tantiangco said last week’s pullback reflected profit-taking following a two-week rally, underscoring continued investor caution.
“This shows that investors are still moving with caution as economic risks remain due to the war in the Middle East,” he said.
Tantiangco noted that while ceasefire developments may support a positive start to the week, market direction will depend heavily on progress in negotiations between the United States and Iran.
He added that despite the near-term risks, valuations remained attractive with the PSEi trading at 10.1 times earnings, below its five-year average of 14.4 times.
Chartwise, the market was said to remain on a bearish footing, trading below key moving averages, with immediate support seen at 5,800 and resistance at 6,050. NAZYLEN JOY MABANGLO
