PHILIPPINE SHARES may trade sideways this week in a hunt for more stock following recent market declines and amid continued uncertainty about the policy direction of US President-elect Donald J. Trump’s administration.
On Friday, the bellwether Philippine Stock Exchange (PSEi) index fell for the fourth straight session, down 0.37% or 24.69 points to end at 6,613.85, while the broader all-share index gained 0.11% or 4.14 points to at 3,739.08.
This was the lowest closing for the PSEi in two weeks or since the end of Nov. 14 which is 6,557.09.
On a weekly basis, the PSEi fell by 2.5% or 166.28 points from its close of 6,780.13 on November 22.
“Local stocks remained within last week’s trading band, unaffected by the lack of strong assets during the Thanksgiving break in the United States,” the online brokerage firm said. 2TradeAsia.com said in the market book.
“The domestic market has again declined after failing to break above its 200-day moving average. In this process, the market broke below the support range of 6,700-6,800. Its MACD (moving average of convergence / divergence) has fallen below the signal line, which means bearish momentum in the short term,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.
This week, Mr. Tantiangco said Philippine stocks may continue to move sideways.
“Since the market is at an attractive level, we may see some hunting episodes. However, we expect that ongoing concerns will continue to affect emotions,” he said. “These include Mr. Trump’s planned protectionist policies and their impact on global economic prospects, as well as uncertainty about the Federal Reserve’s policy outlook.”
“Investors are expected to watch out for our upcoming November inflation data for BSP (Bangko Sentral ng Pilipinas) policy cues. Investors can also watch the S&P Global Philippines manufacturing PMI (purchasing managers index) and labor market data to get a clue about the local economy,” added Mr. Tantiangco.
He placed PSEi support at 6,400 and resistance at 6,700-6,800.
Chief Economist Rizal Commercial Banking Corp. Michael L. Ricafort has placed major market support at 6,600 and resistance at 7,000.
“During the next local policy rate-setting meeting on December 19, the BSP may make another 25-bp (basis point) local policy rate cut as signed by other local monetary authorities recently and may match the Fed’s latest 25-bp rate. reduced in Nov. 7 and a possible 25-bp rate cut on December 18,” he said.
2TradeAsia.com placed PSEi immediate support at 6,500 and resistance at 7,000.
“As 2025 approaches, markets will face uncertainty that may cause prices to fall in the short term. [It is] it is better that they are priced now as ignoring the uncertainty will not make them go away,” said an online trader. – RMD Ochave with Reuters
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