The PSEi climbed 1.87% last week. Investor caution persists as Brent crude tops $80 and Q2 earnings begin. Tantiangco sees next resistance at 6,550 if 6,400 holds.
Alpha Score of 40 reflects weak overall profile with moderate momentum, poor value, moderate quality, moderate sentiment.
The benchmark Philippine Stock Exchange index climbed 1.87% last week to close at 6,404.11. Investor caution remains elevated.
Philstocks Financial research manager Japhet Tantiangco said waning concerns over the US Federal Reserve's policy outlook had helped sustain the market's momentum. He noted that subdued trading activity indicates confidence has yet to fully recover.
Tantiangco said the US-Iran war is the biggest downside risk for the local bourse. The conflict pushed Brent crude oil back above $80 a barrel, threatening the domestic inflation outlook. Disruptions in the Strait of Hormuz have raised concerns over global oil supply. Local fuel prices have been rising and are expected to surge this week.
The peso's continued weakness against the dollar and elevated government bond yields are additional concerns, Tantiangco said. He added that investors will watch second-quarter corporate earnings for the next potential catalyst. The market rallied for three straight weeks on bargain buying. For the rally to continue, stronger catalysts are needed. Without them and with the risks at play, a pullback is possible.
From a technical perspective, Tantiangco said the market remains bullish after closing above the 6,400 resistance level. He expects the index to retest that level this week. If it holds, the next resistance is at 6,550.
Online brokerage 2TradeAsia.com said the softer US inflation reading gave temporary relief. The firm warned that inflation risks remain because of higher crude oil prices. The softer print reduced the immediate need for the Bangko Sentral ng Pilipinas to raise rates to support the peso, 2TradeAsia said. Still, local yields are expected to stay elevated as a buffer against imported inflation.
2TradeAsia recommended gradually accumulating energy and digital infrastructure stocks. It suggested power-related holding firms and telecom companies with data center exposure. The brokerage advised caution on richly valued consumer stocks that could be pressured by higher fuel costs.
The PSEi closed at 6,404.11 on Friday.
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