Philippine stocks are expected to move sideways this week as investors await the result of the Bangko Sentral ng Pilipinas’ and the US Federal Reserve’s policy meetings this week.
“A rate cut from the two as well as hints of further easing are expected to give a boost to sentiment which in turn could help the market achieve a positive close,” Philstocks Financial Inc. research head Japhet Tantiangco said.
He said, however, the local market is still moving ,sideways with a bearish bias as investors maintain a cautious stance, dealing with lingering headwinds while waiting for positive leads.
Aside from the BSP and the Fed policy meetings, investors will also to monitor the peso’s performance against the US dollar.
“A further depreciation of the local currency may weigh on the bourse,” Tantiangco said.
The market’s immediate support is seen at 6,600, while major resistance is expected at 6,800 this week.
Last week, the Philippine Stock Exchange index lost 112 points, or 1.67 percent, to close at 6,616 on Friday, as investors turned cautious.
Average value turnover improved 10 percent to P6.7 billion from the previous week’s level, while the average net foreign selling eased to P52 million.
Wall Street finished a lackluster week on a muted note Friday as concerns about rising Treasury bond yields competed with enthusiasm over artificial intelligence equities.
Of the major indices, only the Nasdaq mustered a gain in Friday’s session. The tech-rich index was also the only of the three leading US benchmarks to conclude the week higher.
“Equities are kind of treading water,” said LBBW’s Karl Haeling. “A negative influence to some extent is the rise in bond yields.”
The latest US consumer price index data released this week showed prices ticked higher in November and the wholesale data also showed stubborn inflationary pressures.
“Yields rose to their highest levels in over two weeks as markets brace for the Federal Reserve’s final meeting of the year, reflecting concerns over sticky inflation,” said Chris Beauchamp, chief market analyst at online trading platform IG.
There is also growing concern over the inflationary pressures from President-elect Donald Trump’s pledges to cut taxes and impose tariffs, as inflation still stands above the Fed’s target.
“While the markets still anticipate a rate cut from the Federal Reserve next week, the likelihood of a move in January has dropped,” said Patrick Munnelly, partner at broker Tickmill Group.
The CME FedWatch tool shows the market sees a more than 75 percent chance that the Fed will hold rates steady in January.
In Europe, the Paris CAC 40 index ended the day down 0.2 percent after French President Emmanuel Macron named his centrist ally Francois Bayrou as prime minister, ending days of deadlock over finding a replacement for Michel Barnier.
Frankfurt also dipped, with Germany’s central bank sharply downgrading its growth forecasts on Friday for 2025 and 2026. It predicted a prolonged period of weakness for Europe’s biggest economy.
London stocks were also lower after official data showed that the UK economy unexpectedly shrank for the second consecutive month in October. With AFP
