PHILIPPINE SHARES may go away aside as investors monitor updates on the US-Iran conflict, with market sentiment driven by the outcome of negotiations between the warring countries.
On Friday, the Philippine Stock Exchange (PSEi) index rose 0.13% or 8.30 points to close at 6,098.21, while the broader index of all shares fell 0.19% or 6.63 points to end at 3,408.53.
This was the PSEi’s best close in a month or so since it closed at 6,113.58 on March 12.
On a weekly basis, the bellwether index rose 99.53 points from its April 1 close of 5,998.68.
“Local stocks rebounded above the 6,000 psychological zone, as the two-week US-Iran deal resulted in a sharp drop in oil prices, easing inflation concerns,” 2TradeAsia.com said in a note.
“The end of the fire between the US and Iran caused optimism in the local market, causing it to grow even more last week. In this process, the market was able to return above the 6,000 level,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.
This week, developments in the Middle East will continue to be the dominant sentiment, he said.
“Continued negotiations and signs that they will be reached are expected to push the market forward. If the situation reverses, the local market is expected to decline. Overall, investors are advised to be cautious as the US-Iran truce is considered fragile.”
He said technical indicators point to a cautious outlook, adding that progress in negotiations could help the PSEi retest its 6,150 resistance line.
“The state of the world’s macro economy is still clinging to the fragile stability of the Middle East. Although the cessation of hostilities between the US and Iran has officially begun, shipping through the Strait of Hormuz from the data of the past days remains tricky… “Although market cycles suggest that recovery is inevitable, the fast path is inevitable and it may get worse before it gets better.”
It placed immediate support for the PSEi at 5,800, resistance at 6,050, and secondary resistance at 6,300.
The US and Iran failed to reach an agreement to end their war despite lengthy talks that ended on Sunday in the Pakistani capital Islamabad, jeopardizing a fragile ceasefire, Reuters reported.
Each side blamed the other for the failure of 21-hour talks to end the fighting that has killed thousands of people and sent oil prices soaring around the world since it began six weeks ago.
Iran’s official Tasnim news agency said the US’s “excessive” demands had hindered reaching a deal. Some Iranian media have said that there is agreement on many things but the Strait of Hormuz and Iran’s nuclear program are the main points of difference.
The two sides agreed on Tuesday to a two-week ceasefire in an effort to end the war that began on February 28 with US and Israeli airstrikes in Iran. – Alexandria Grace C. Magno with Reuters
