Market to take cue from Mideast conflict, inflation

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April 6, 2026 | 12:00am

MANILA, Philippines — Share prices are likely to move sideways on another shortened trading week, with direction to take cue from the upcoming inflation data and continuing developments in the Middle East.

The Philippine Stock Exchange index (PSEi) closed in positive territory last week at 5,998.68, up by 0.43 percent week-on-week.

“Hopes that the war in the Middle East would end soon fueled the local market to a positive close last week. With this, the bourse was able to snap its four-week losing streak. However, it still fell short of closing above the 6,000 line,” Philstocks Financial research manager Japhet Tantiangco said.

Tantiangco said the local market is still deemed to be at bargain levels, with the PSEi trading at a price-to-earnings ratio of 10.1x as of last Wednesday’s closing, below its last five years’ average of 14.4x.

This week, Tantiangco said uncertainties over the conflict in the Middle East are still expected to weigh on investors’ sentiment.

“The US’ military threats toward Iran which risks further escalation of the conflict cast doubts on the former’s claim that the war would end in two to three weeks. On the other hand, encouraging developments with respect to the Strait of Hormuz including: the Philippines’ safe passage through the Strait as granted by Iran; the discussion of around 40 countries of means to reopen the Strait and Iran and Oman’s drafting of a protocol to monitor traffic in the Strait, may give the market relief,” he said.

Tantiangco said investors would also keep an eye on the Philippines’ March consumer price index data, which will give further clues on how the war is affecting the country’s macroeconomic condition.

“We anticipate March inflation to fall in the latter end of the BSP’s expected forecast of 3.1 to 3.9 percent, with real risk of a surprise beyond the four percent upper limit. This pressure drives participants to maintain selective commodity exposure, hedge FX volatility in EM (emerging market) currencies and avoid over-weighting rate-sensitive sectors until clearer resolution signals emerge,” 2TradeAsia.com said.

The online arm of F. Yap Securities Inc. said markets have priced in some de-escalation optimism, yet oil prices stay elevated amid disrupted flows through the Strait of Hormuz.

“We note that even a near-term ceasefire would not deliver immediate relief: supply chain disentanglement, tanker rerouting and inventory rebuilds will take additional weeks, if not months. This dynamic supports a cautious oil bias with upside risk to energy equities, while broader equities face headwinds from sticky inflation pass-through and delayed rate-cut expectations,” it said.

Immediate support is seen at 5,800, while resistance is at 6,050.

There will be no trading on Thursday in celebration of Araw ng Kagitingan.