Local stocks ended Tuesday’s session virtually unchanged as investors balanced optimism over potential diplomatic breakthroughs in the Middle East against domestic concerns regarding tightening monetary policy.

The Philippine Stock Exchange index (PSEi) edged up 2.67 points, or 0.04 percent, to close at 6,018.70. While conglomerates led the advancing sectors, the broader market’s upward momentum was largely neutralized by declines in property and service stocks.

Trading activity remained subdued, with 833 million shares changing hands, resulting in a total turnover of ₱6.91 billion. Market breadth was slightly positive, as gainers led decliners 106 to 90, while 76 issues remained unchanged.

The market’s directionless performance was due to a cautious "wait-and-see" approach among local participants, according to Luis Limlingan, managing director at Regina Capital Development Corp.

He noted that sentiment remained stable yet restrained, as the lack of clarity regarding international peace negotiations continues to suppress risk appetite.

Investors are also recalibrating their portfolios ahead of the Bangko Sentral ng Pilipinas’ upcoming policy meeting, where officials are expected to debate a rate hike to rein in elevated inflation.

Geopolitics remained a primary driver for the session’s volatility. Japhet Tantiangco, research manager at Philstocks Financial, said the index managed to stay in positive territory on the back of hopes that the US and Iran would reach a diplomatic agreement before their current ceasefire expires.

However, initial gains were trimmed throughout the afternoon as lingering uncertainties regarding the Middle East kept buyers from making aggressive bets.

The stability in the equities market coincided with a retreat in global energy costs. Michael Ricafort, chief economist at Rizal Commercial Banking Corp., observed that the PSEi’s slight gains over the last two trading days followed a decline in Nymex crude oil prices toward one-month lows.

This downward pressure on oil came after Iran confirmed its participation in a second round of talks hosted in Pakistan, a move that analysts say increases the probability of an extended ceasefire or a formalized deal with Washington.

Despite the marginal gains, the local benchmark remains sensitive to the dual pressures of global commodity fluctuations and the BSP’s stance on interest rates. Market participants expect the index to continue trading within a tight range until a clearer catalyst emerges from either the central bank or the geopolitical front.