Philippine stocks are expected to remain under pressure this week as investors react to intensifying geopolitical tensions stemming from the conflict in Iran. Concerns over rising oil prices and inflation continue to shape market sentiment.
On Friday, July 26, the Philippine Stock Exchange index (PSEi) fell by 0.03%, closing at 6,281.01, while the broader all shares index decreased by 0.13%, ending at 3,422.48. This marks a week-on-week decline of 123.1 points from the previous week's close of 6,404.11.
Market Dynamics Amid Geopolitical Strains
The local market declined as sentiment got hammered by the rise in global oil prices, with Brent crude hitting $100 per barrel.
Japhet Louis O. Tantiangco, Philstocks Financial, Inc.
Rising oil prices have been a significant concern, with Brent crude reaching $100 per barrel. The Philippine peso has also weakened, hitting a record low of P61.85 amid a strong dollar and increasing import costs.
F. Yap Securities, Inc. noted that the ongoing hostilities in the Gulf have made investors wary. As the situation escalates, it is likely to keep global oil prices high, which could further elevate inflation in the Philippines.
With inflation already above 6%, analysts expect the Bangko Sentral ng Pilipinas (BSP) to maintain a hawkish stance on interest rates, limiting any potential easing measures. This is particularly concerning given that the Philippines relies heavily on imported fuel.
Looking forward, the upcoming State of the Nation Address by President Ferdinand Marcos Jr. is anticipated to provide insights into potential economic policies that could address the current macroeconomic challenges.
Market analysts predict that the local bourse may continue to trend downwards, with support seen at 6,150 and resistance at 6,400 as investors navigate these turbulent waters.