The Philippine Stock Exchange (PSE) index may struggle to maintain its momentum this week due to a lack of fresh drivers and renewed hostilities in the Middle East.
On Friday, the PSE index jumped by 1.24% or 78.96 points to close at 6,404.11, while the broader all shares index rose by 0.88% or 30.36 points to end at 3,444.07.
This was its best close in more than four months, with the last time it ended above the 6,400 line being on March 3.
The PSE index surged by 117.41 points from July 10’s finish of 6,286.70, with a notable increase of 138 points on Friday.
A key factor supporting the market was the "cooler US June inflation," which attracted buying activity and lifted the PSEi 138 points to 6,404.
The Federal Reserve's expected adoption of a status quo on interest rates may have contributed to the market's positive momentum, but trading remains anemic, implying that confidence remains weak.
The renewed conflict between the United States and Iran poses a significant risk to the local bourse, with potential oil supply disruptions threatening the Philippines' inflation outlook.
The Brent crude price has pushed back above $80 per barrel, which may lead to increased fuel prices in the Philippines, further accelerating headline Consumer Price Index (CPI) by September.
The market's latest rally has been driven mainly by bargain hunting, but this may lose steam this week without strong catalysts.
The market is expected to look towards second quarter corporate results for a possible impetus, and if the PSE index is able to hold ground above the 6,400 resistance line, its next resistance is seen at 6,550.
