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PHILIPPINE SHARES could decline further this week as market sentiment remains fragile amid lingering global trade uncertainties due to the Trump administration’s changing policies.

On Thursday, the bellwether Philippine Stock Exchange index (PSEi) slipped by 0.02% or 1.77 points to close at 6,376.79, while the broader all shares index rose by 0.28% or 10.64 points to 3,779.22.

Still, week on week, the PSEi rose by 0.56% or 35.26 points from its 6,341.53 close on May 30.

Philippine financial markets were closed on Friday in observance of Eid al-Adha or the Feast of Sacrifice.

“Record-low inflation capped another volatile week for local equities,” online brokerage 2TradeAsia.com said in a market note.

“The local market managed to bounce back in last week’s trading after two consecutive weeks of losses. However, the market failed to make it through the 6,400 resistance line. Trading has also been lethargic, as seen in the thin value turnovers. Overall, market confidence is seen to remain low, which explains the tepid movements,” Philstocks Financial Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

For this week, market sentiment is expected to remain bearish due to jitters over global trade developments, he said.

“On a positive note, our latest inflation print may raise hopes of more aggressive policy easing by the Bangko Sentral ng Pilipinas (BSP), which in turn may give the market a boost. Investors are also expected to digest our labor market data as this would give clues on the strength of our local economy,” Mr. Tantiangco said.

Philippine headline inflation slowed to 1.3% in May from 1.4% in April and 3.9% in the same month last year. This was the lowest inflation rate in five and a half years, or since the 1.2% print posted in November 2019.

Meanwhile, the unemployment rate went up to 4.1% in April from 3.9% in March.

“Chart-wise, the local market is observed to be trading sideways bound within its 50-day and 200-day exponential moving averages (EMA). A break above the 200-day EMA would strengthen the case for a sustainable rally, but a break below the 50-day EMA may lead to a further pull back, possibly near the 6,150 support,” he added, noting that the market remains undervalued.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in an e-mail that the PSEi’s next minor support is 6,290 to 6,300, while its immediate resistance is at 6,500.

For its part, 2TradeAsia.com placed the PSEi’s immediate support at 6,300 and resistance at 6,500-6,550.

“As positive fundamentals begin to matter again, factor allocations may tilt towards earnings elasticity and low volatility as markets enter what might be a late-cycle, high-risk-premia regime,” it said. “Agility remains key in the third quarter amid potential regime shifts; favor liquidity and rethink exposure to high duration equity.” — Revin Mikhael D. Ochave