Philippine stocks are expected to trade sideways this week ahead of the policy meetings of the US Federal Reserve and the Bangko Sentral ng Pilipinas.
Philstocks Financial Inc. research head Japhet Tantiangco said investors would look for cues on interest rates as the Fed and the BSP are set to hold their final policy meetings for the year.
The Fed will hold its meeting on Dec. 12 and 13, while the BSP’s Monetary Board will convene on Dec. 14.
“Hint of easing may spur optimism in the market, while hint for further tightening is expected to weigh on sentiments,” Tantiangco said.
Investors will also monitor the release of several economic data including foreign trade, foreign investments and overseas Filipino cash remittances which would also provide clues on the status of the domestic economy, he said.
“Chartwise, the market may retest the 10-day exponential moving average. Failure to get back above the said line would be considered as a bearish development,” he said.
The bellwether Philippine Stock Exchange index declined by 0.17 percent last week to close as 6,234.77 amid profit-taking.
Tantiangco said that as the index was on a two-week losing streak, share prices were at bargain levels, which could provide traders an opportunity to accumulate on undervalued stocks before the end of the year.
He said strong buying could happen if investors see catalysts that would brighten the economic outlook.
The market’s support is seen at 6,000, while major resistance is projected at 6,400 this week.