PHILIPPINE share prices may consolidate this week as investors may opt to stay on the sidelines as the Greek debt deal drama unfolds.

“All eyes will remain focused on Europe but the domestic market chatter will continue to be dominated by corporate goings-on its by-products from the rumor mill,” Jun Calaycay of Accord Capital Equities Corp. said

“Following Greece’s adherence to austerity measures, attention might shift to other euro zone members whether the latter would accept conditions attached to bailout packages,” Freya Natividad, investment analyst at 2TradeAsia.com. said.

Last week, Greece finally reached an agreement for a bailout package to avoid a default, but the deal immediately encountered stumbling blocks after European leaders demanded additional austerity measures and some Greek lawmakers opposed the deal.

These events dragged the Dow Jones industrial average by 89.23 points, or 0.69 percent, to 12,801.23 on Friday.

The local market has become quite expensive relative to its regional counterparts at 17 times trailing price to earnings ratio after weeks of rallies that saw the market rewrote record levels multiple times this year, AB Capital Securities Inc., said.

While technical indicators suggest that the main index continues to look bullish, managing to move within its long-term uptrend channel, any correction should be viewed as a buying opportunity, AB Capital added. Major support for the PSEI is at 4,500 with a technical target of 5,150.

On the domestic economic front, the slower inflation for January raises bets the Bangko Sentral ng Pilipinas may encourage to cut policy rates further, but discounting this prospect may kick in much later with the next policy meeting not until the first week of March.

“Nevertheless, this should make revisiting interest-rate sensitive issues as possibilities for the short-term bag a worth-while undertaking. This includes Financials and Property counters,” Calaycay said.