STOCKS could move sideways this week due to the ongoing conflict between Russia and Ukraine and its impact on oil prices.

On Friday, the 30-member Philippine Stock Exchange index (PSEi) dropped 20.14 points or 0.27% to 7,418.79, while the broader all shares index fell 10.62 points or 0.27% to finish at 3,923.69.

Week on week, the PSEi increased 148.43 points from its finish of 7,270.36 on Feb. 11.

“The local bourse regained strength as investors took advantage of last week’s dip to reposition funds ahead of a potential 7,500 retest,” online brokerage 2TradeAsia.com said in an e-mail.

For the coming week, analysts said tensions between Russia and the Ukraine could continue to affect the market.

“The market will continue its volatility in the coming week as Russia continues to threaten Ukraine with a war. Also, global inflation from supply constraints due to the pandemic, as well as rise in oil prices attributed to the geopolitical crisis from Russia-Ukraine conflict,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message.

Russia’s strategic nuclear forces held exercises overseen by President Vladimir Putin on Saturday, and Washington accused Russian troops massed near Ukraine’s border of advancing and being “poised to strike,” Reuters reported.

With Western fears of war rising, the White House said US President Joseph R. Biden, Jr.’s national security team told him they still believed Russia could launch an attack in Ukraine “at any time” and he planned to convene his top advisers on Sunday to discuss the crisis.

Foreign ministers from the G7 group of rich nations said they had seen no evidence Russia is reducing its military activity in the area and remained “gravely concerned” about the situation.

On Friday, Brent crude futures settled 57 cents or 0.6% higher at $93.54 a barrel, while US West Texas Intermediate (WTI) crude dropped 69 cents or 0.5% at $91.07 a barrel.

Meanwhile, expectations of sustained low borrowing costs at home in the first quarter despite the US Federal Reserve’s planned rate hikes will support the local market, 2TradeAsia.com said.

The Bangko Sentral ng Pilipinas last week kept benchmark interest rates steady to support the economy’s recovery.

“[In] the near term, should global rates increase at a rate unmirrored at home, local equities may likely benefit from yield drops in competing fixed income securities. This is on top of capital flight towards emerging markets where there is more legroom for alpha,” the online brokerage said.

2TradeAsia.com said the release of corporate financial reports will drive trading this week as results are expected to boost confidence in seasonal industries like consumer, banking, and leisure and tourism.

The brokerage put the PSEi’s immediate support at 7,300 and resistance at 7,500 to 7,550 for the week.

Meanwhile, Mr. Pangan said the market’s immediate support could be at 7,200 and immediate resistance at 7,500. — L.M.J.C. Jocson with Reuters

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