PHILIPPINE SHARES could move sideways this week as investors monitor overseas developments, with profit-taking also likely to ensue after the market’s five-day rally.

On Friday, the bellwether Philippine Stock Exchange index (PSEi) rose by 1.25% or 78.33 points to close at 6,298.29, while the broader all shares index went up by 0.67% or 25.1 points to 3,724.20.

This was the PSEi’s best finish in six weeks or since it ended at 6,378.86 on Jan. 23.

Week on week, the PSEi surged by 5% or 300.32 points from its 5,997.97 close on Feb. 28.

“The local market exhibited upward momentum last week as it went on a five-day gaining streak. It was able to get past its 10-day and 50-day exponential moving averages, which are taken as bullish signs. Trading activity also improved, implying that the rally had conviction,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

For this week, the market could move sideways, he said.

“Given the five-day rally, we may see some episodes of profit taking, which could cause the market to decline. Still, we expect optimism to remain driven by prospects on the BSP’s (Bangko Sentral ng Pilipinas) monetary policy easing following our latest inflation print, and our robust fourth quarter and 2024 corporate results,” he said.

Headline inflation slowed to 2.1% in February from 2.9% in January, the government reported last week. This was the slowest monthly print in five months or since the 1.9% in September 2024.

This was also below the BSP’s 2.2%-3% forecast for the month and the 2.6% median estimate in a BusinessWorld poll of 18 analysts.

The Monetary Board will next meet to discuss policy on April 3. Analysts said slower February inflation gives the BSP room to resume its rate-cut cycle at next month’s meeting following its surprise pause at the February review.

“The peso’s appreciation, if it continues, is also expected to help,” Mr. Tantiangco added. “A key downside risk to the market, however, is the uncertainties with respect to the US’ trade policies.”

He put the PSEi’s major support at 6,000 and major resistance at 6,400.

US President Donald J. Trump suspended on Thursday tariffs of 25% he had imposed last week on most goods from Canada and Mexico, the latest twist in a fluctuating trade policy that has whipsawed markets and fanned worries about inflation and growth, Reuters reported.

The exemptions for the two largest US trading partners, expire on April 2, when Mr. Trump has threatened to impose a global regime of reciprocal tariffs on all US trading partners.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort placed the PSEi’s support at 6,000 and resistance at 6,300-6,400.

Online brokerage 2TradeAsia.com pegged the PSEi’s immediate support at 6,000 and resistance at 6,400. — Revin Mikhael D. Ochave with Reuters