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Philippines
Wednesday, February 5, 2025

Stock market seen moving sideways with upward bias

Philippine stocks are expected to move sideways with a downward bias this week amid fears of fewer interest rate cuts due to rising inflation rate.

Online brokerage firm 2TradeAsia.com said the release of the US Federal Reserve’s December minutes last week would continue to influence the market’s movement this week.

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The Fed noted the increased upside risks to the inflation outlook and expected changes in trade and immigration policy of the US government once US president-elect Donald Trump assumes office.

As a result, analysts are now expecting two rate cuts instead of the earlier expectations of four rate cuts in 2025.

“Emerging market equities just recently entered correction territory as a result of this slower policy easing, disadvantageous currency spreads, and US yields that have rapidly risen since late 2024,” 2TradeAsia.com said.

Investors are also expected to watch out for new catalysts including the US December 2024 inflation data which is expected to give clues on the Fed’s policy outlook.

“The movement of the US’ long term treasury yields may also affect the local market. A decline in the yields is expected to help in lifting the bourse while a rise may weigh on it,” Philstocks Financial Inc. research head Japhet Tantiangco said.

Meanwhile, the movement of the peso against the dollar could also be another factor on the market’s performance.

The Philippine Stock Exchange index last week declined by 107 points or 1.63 percent week-on-week to close at 6,496.32.

Average value turnover jumped to P4.27 billion, while foreigners were net sellers with an average of P300 million.

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