PHILIPPINE SHARES could rise further this week as the market remains “cautiously optimistic” about a long-term deal between Iran and Israel and developments ahead of the end of the 90-day pause in the Trump administration’s plan to impose “reciprocal” tariffs on its major trading partners.
On Friday, the benchmark Philippine Stock Exchange index (PSEi) returned to the 6,400 level, jumping by 1.22% or 77.62 points to end at 6,408.27. The broader all shares index also rose by 0.84% or 31.61 points to 3,792.06.
Week on week, the PSEi went up by 1.08% or 68.5 points from the 6,339.77 close on June 20.
“Global markets wrestled with moderate growth outlook and volatile oil prices, amid a still cautious Federal Reserve with the ongoing ceasefire between Israel and Iran,” online brokerage 2TradeAsia.com said in a market note.
“The local market managed to bounce back last week as Middle East tensions eased. However, trading was still thin, reflecting tepid market confidence, with many still on the sidelines amid lingering uncertainties,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.
A ceasefire to the 12-day Israel-Iran conflict went into effect early last week, Reuters reported. Israel launched the air war on June 13, attacking Iranian nuclear facilities and killing top military commanders as well as civilians in the worst blow to the Islamic Republic since the 1980s war with Iraq.
Iran retaliated with barrages of missiles on Israeli military sites, infrastructure and cities. The United States entered the war on June 22 with strikes on Iranian nuclear facilities.
For this week, the mood could be “cautiously optimistic,” Mr. Tantiangco said.
“While Middle East tensions have subsided, the relation between Israel and Iran remains uncertain. This is expected to keep investors on a cautious stance. On a positive note, the easing of global oil prices and the rebound of the local currency may continue to provide support to the local bourse,” he said.
“Investors are also expected to deal with the uncertainties over US President Donald J. Trump’s July tariff deadline. Hopes that the said deadline would be extended may give sentiment a boost.”
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in an e-mail that the PSEi’s immediate support is at 6,105-6,200, while immediate resistance is at 6,500, with sentiment expected to get a boost if the situation in the Middle East continues to improve.
2TradeAsia.com placed the PSEi’s immediate support at 6,300 and resistance at 6,500-6,550.
“Global markets are navigating persistent geopolitical currents, even as the immediate Middle East conflict has slightly de-escalated; this fragile stability, however, does not erase the underlying vulnerability of global supply chains,” it said. “Investors must grapple with the monetary policy environment increasingly constrained by geopolitical realities and the unpredictable, yet impactful, weaponization of trade.” — R.M.D. Ochave with Reuters
