Local equities snapped a four-day losing streak as investors selectively accumulated beaten-down shares, tracking an overnight rally on Wall Street fueled by optimism surrounding the potential geopolitical de-escalation between the United States (US) and Iran.

The benchmark Philippine Stock Exchange index (PSEi) advanced 27.30 points, or 0.46 percent, to settle at 5,920.70 on Thursday, May 21.

The broader all-shares index also tracked the positive momentum, supported heavily by the services sector, which paced the day's gains. On the other end of the spectrum, the industrial sector emerged as the sole counter to post losses by the closing bell.

Despite the headline gain, trading activity remained subdued, with total volume reached 1.03 billion shares, generating a turnover value of ₱6.58 billion. Market breadth remained negative, with decliners outnumbering gainers 99 to 69, while 65 issues closed unchanged.

Luis Limlingan, managing director at Regina Capital Development Corp., noted that the local market finally found a floor after successive sessions of declines, driven primarily by opportunistic buying in select heavyweights.

However, the upward momentum lacked broader conviction. Gains were notably trimmed during the afternoon session as a wave of late-day selling pressure resurfaced, capping the index's intraday upside and forcing a more modest close.

Japhet Tantiangco, research manager at Philstocks Financial Inc., attributed the early bounce to positive spillovers from US equity markets. Investor sentiment was bolstered globally following statements from US President Donald Trump indicating that Washington and Tehran are in the final stages of negotiations, sparking widespread institutional hope that a formal peace agreement could be reached in the near term.

Local analysts warn that the recovery may face headwinds as institutional fund managers continue to favor short-term trading positions over long-term commitments.

With macroeconomic uncertainties and geopolitical headlines remaining fluid, the Philippine stock market is expected to trade within a volatile range until clearer domestic catalysts emerge to sustain a prolonged rally.