THE local stock market is expected to remain under pressure this week after the benchmark index slipped below the key 5,800 level, with investors closely watching inflation data and developments in the Middle East for fresh direction.
The benchmark Philippine Stock Exchange index (PSEi) fell 3.23 percent week-on-week as it closed at 5,768.12 last Friday, dragged by persistent inflation concerns, geopolitical tensions, a weak peso and heavy foreign selling.
Online brokerage 2TradeAsia.com said the market’s decline reflected growing concerns over inflation and interest rates, with investors increasingly pricing in the possibility of a larger-than-usual rate hike from the Bangko Sentral ng Pilipinas later this month.
The brokerage noted that geopolitical volatility remains the dominant theme for global markets as negotiations between the United States and Iran continue alongside periodic military confrontations.
It also warned that higher global yields, persistent inflation pressures and uncertainty over domestic economic policy could continue to weigh on risk assets in the second half of the year.
Japhet Tantiangco, research manager at Philstocks Financial Inc., said sentiment had turned more bearish as tensions between the US and Iran intensified despite ongoing peace negotiations.
He said investors were also digesting weaker-than-expected first-quarter corporate results, which have raised concerns about earnings prospects for the rest of the year.
“In Q1 2026, the PSEi members’ average revenue and net income growth was at 8.4 percent and 4.9 percent, respectively, slower than the same quarter last year’s 10.8 percent and 13.3 percent,” Tantiangco said.
While Brent crude prices have retreated below the $100-per-barrel mark amid hopes of an extended ceasefire, he said the situation remained fragile and could quickly reverse if hostilities escalated.
Tantiangco added that investors would be closely monitoring May inflation data due on June 5, which could provide clues on household spending and the BSP’s policy path.
A reading that remains elevated or exceeds April’s 7.2-percent surge could further dampen sentiment, he said.
The analyst also noted that while the peso had recovered slightly and bond yields eased from recent highs, both remain at levels that continue to pose challenges for equities.
From a technical perspective, Tantiangco said the PSEi’s break below 5,800 was a critical development.
If the market regains the 5,800 level, trading could return to a 5,800-6,000 range. Failure to do so could open the door for a decline toward the next support level at 5,600.
NAZYLEN JOY MABANGLO