Philippine shares could finally catch their breath this week.
With tensions in the Middle East easing and hopes growing for a more durable US-Iran peace agreement, investors have one less geopolitical headache to price in. Add lower fuel pump prices and the ingredients are in place for a steadier Philippine Stock Exchange index, with bargain hunters and institutional window-dressing likely to keep trading active as the semester draws to a close.
According to 2TradeAsia, the PSEi is expected to trade within the 5,820 to 6,150 range, with investors favoring defensive stocks while selectively accumulating fundamentally strong companies, particularly those viewed as potential candidates for future index inclusion. Cheaper oil also improves the earnings outlook for transport, consumer and logistics firms by trimming fuel costs and leaving consumers with a little more spending power.
The technical picture, however, still calls for discipline. RCBC Chief Economist Michael Ricafort sees immediate resistance at 6,110 to 6,160, with a stronger ceiling at 6,210 to 6,250. On the downside, the 6,000 mark remains the market’s key psychological support. Staying above that level would preserve the broader recovery trend, while a convincing breakout could revive a run toward June’s 6,396 high.
The bigger shift is one of sentiment. The resumption of shipping through the Strait of Hormuz has eased fears of a fresh oil supply disruption, softening inflation concerns and improving the outlook for an import-dependent economy like the Philippines.
That optimism, however, still comes with an asterisk. Any resurgence in Middle East tensions or a more hawkish US Federal Reserve could quickly test the market’s newfound resilience. For now, though, investors appear willing to trade fear for fundamentals.
