INFLATION and interest rate outlooks will particularly be in focus during this shortened trading week, analysts said, with investors zeroing in on the outcome of the US central bank's two-day policy meeting that begins Tuesday.

Philippine financial markets will only be open for four days, with Thursday, May 1, a regular holiday in observance of Labor Day.

The bellwether Philippine Stock Exchange index (PNB) has bounced back after a three-week decline, closing 2.88 percent higher week-on-week at 6,628.75 last Friday.

Even with last week's rebound, Philstocks Financial Inc. senior research analyst Japhet Tantiangco said market confidence remained lacking as "trading was anemic."

Average net market value turnover contracted by 56.62 percent to P4.41 billion, while net foreign selling averaged P560 million last week.

"[M]acroeconomic concerns are still expected to be present, primarily with respect to the Philippines' inflation and interest rate outlook. These, in turn, are expected to weigh on the market," Tantiangco said.

Investors will particularly be looking out for comments from Federal Reserve officials following the April 30-May 1 policy meeting, given the latest macroeconomic data that has dampened hopes for a mid-year rate cut.

US growth in the first quarter came in below expectations at 1.6 percent, its slowest pace in almost two years following a sharp uptick in core inflation.

"Finally, investors are expected to watch out for positive catalysts that could bring back the bullish sentiment," Tantiangco said.

Expect inflation and interest rate movers to affect share price movements, online brokerage 2TradeAsia.com said, noting that the result of the Fed meeting will likely be "hyper-analyzed" for any tonal change indicators moving forward.

"The postponed midyear rate cut from the Fed has hampered the outlook for late 2024; brace for the consequent postponement of major capex (capital expenditure) and weaker transaction markets, at least for leverage-sensitives," it added.

"Expect tension between a disheartened market that originally expected rate cuts by [the second quarter] versus bargain hunters aiming for lower average cost and higher dividend yield in the medium term."

Rizal Commercial Banking Corp. chief economist Michael Ricafort, meanwhile, said that bargain hunters would be on the "lookout for discounts, especially if the dust settles and the geopolitical situation stabilizes."

The local market, however, is still expected to be on a "wait-and-see stance" in the coming days, given continued tensions in the Middle East.

Chart-wise, analysts said that the stock market's support would be between 6,300 and 6,400 and resistance at 6,700.