PSEi seen bearish as war, oil rally persist

Philippine stocks may remain under pressure this week as escalating conflict in the Middle East and rising oil prices continue to dampen investor sentiment.

According to Philstocks Financial research manager Japhet Tantiangco, the local market is expected to stay on a bearish footing and challenge the 6,000 main index level amid the uncertainties surrounding the US/Israel–Iran conflict.

“The bearish moves continued as the conflict in the Middle East and the consequent rise in oil prices hammered the local market,” Tantiangco said, adding that the bourse could remain weak as long as the geopolitical tensions linger.

For the week, investors are expected to closely monitor developments related to the conflict, as any signs of de-escalation could help lift market sentiment. In contrast, the absence of such signals may continue to weigh on the market.

Investors are also likely to take cues from global oil prices and the movement of the peso, which have both been under scrutiny in recent sessions. Tantiangco noted that a further spike in oil prices and continued depreciation of the local currency could drag the market lower.

The Philippine Stock Exchange Index (PSEi) dropped 261 points or 4.14 percent last week, to close at 6,058.

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Despite the recent decline, valuation metrics suggest that the Philippine stock market remains relatively cheap. As of Friday’s close, the local bourse was trading at a price-to-earnings ratio of 10.2 times, below both its historical average of 14.4 times and the regional average of 18.3 times.

“These marketability ratios show that the local bourse is at bargain levels,” Tantiangco said.