The stock market is expected to move sideways with a slight upward bias this week as investors await the U.S. Federal Reserve’s policy meeting.
Analysts believe the market is also due for a technical rebound after five straight weeks of decline.
“With the market at attractive levels, we may see bargain hunting this week,” said Japhet Tantiangco, research head for Philstocks Financial Inc.
With the Fed widely expected to cut rates this week, analysts said investors are hoping for further easing by the Bangko Sentral ng Pilipinas (BSP), which could boost the local equities market.
“A strong rally is not expected, however, unless we see fresh positive leads,” Tantiangco said.
Meanwhile, Rizal Commercial Banking Corp. chief economist Michael Ricafort said dovish signals from the BSP on a possible rate cut before the end of the year could spark a rally in the current lackluster trading.
“These Fed rate cuts could be matched locally by the BSP so that a healthy interest differential would eventually be maintained to help support and stabilize the peso exchange rate, import prices, and overall inflation,” Ricafort said.
“Further cuts in local policy rates are possible if the peso exchange rate remains relatively stable or stronger, global crude oil prices at among three-month lows and also among four-year lows or since May 2021, and if headline inflation remains well within the BSP’s inflation target of 2%-4% for the coming months,” he added.
Last week, the Philippine Stock Exchange index declined 0.65 percent to close at 6,109.21, while the broader all-shares index dipped 0.19 percent to 3,685.59.
Average daily value traded stood at P6.37 billion, up from P5.18 billion the previous week. Foreign investors remained net sellers, with outflows reaching P154 million.
