Sideways trading with downward bias seen this week

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June 8, 2026 | 12:00am

MANILA, Philippines — The local stock market may move sideways with a downward bias this week amid lack of a strong catalyst to jumpstart a sustained rally.

Following a softer-than-expected May inflation, the Philippine Stock Exchange index was able to close in the positive territory last Friday at 5,938.38, up by 2.94 percent week-on-week.

Philstocks Financial research manager Japhet Tantiangco said the local market has been picking up momentum recently on the back of bargain hunting, boosted by the country’s lower than expected May inflation.

But with the latest inflation print remaining above the government’s two to four percent target, Tantiangco said monetary policy tightening might still be on the table.

“However, sustainability of the momentum remains questionable, as the market continues to face uncertainties especially with the US-Iran situation,” he said.

Tantiangco said the situation in the Middle East is still deemed unstable amid recent exchanges of military force between the US and Iran.

“The dimming outlook for a peace deal between the two may weigh on the market this week. If tensions re-escalate, it may drag the local bourse lower,” he said.

Tantiangco said the local market is still considered to be on a downtrend chartwise as it is having a hard time getting past its 50-day exponential moving average and the 6,000 resistance line.

“Moving forward, strong catalysts, particularly ones that point to a further slowdown of inflation and a re-acceleration of economic growth, are deemed needed for the market to break out of its current resistance levels with conviction. Without such, the market may still move with a downward bias,” he said.

Brokerage 2TradeAsia.com, for its part, said that while the near-term arrest in headline inflation momentum to 6.8 percent in May from 7. 2 percent in April, is a constructive development, a single data point does not make a trend, noting that portfolios must remain positioned for impaired consumer confidence and elevated cost of capital entering the third quarter.

The online arm of F. Yap Securities Inc. said impending interest rate and climate headlines will be monitored closely as sources of immediate catalysts for localized volatility.

“Liquidity preservation and strict risk management remain paramount; accumulate defensive large-caps on weakness while trimming high-beta exposure to shield capital from macro headwinds,” 2TradeAsia.com said.

“For the upcoming shortened trading week, anticipate compressed price action amid digestion of lower inflation vis-a-vis fragile broader fundamentals heading into the third quarter,” it said.