Stocks in the Philippines are likely to drop further this week due to changing policies of the Trump administration, as market sentiment lingers in the uncertainty of global trade.
The Philippine Champions Stock Exchange Index (PSEI) fell 0.02% or 1.77 points to close at 6,376.79 points on Thursday, while the higher stock index of all stocks rose 0.28% or 10.64 points to 3,779.22.
Nevertheless, during the week, PSEI closed 6,341.53 on May 30, and psei rose by 0.56% or 35.26 points.
Philippine financial markets closed on Friday to observe Eid or a feast of sacrifice.
“Record flows limit another turbulent week for local stocks,” online brokerage 2tradeasia.com said in the market notes.
“The local market successfully rebounded in last week’s trading after two consecutive weeks of losses. However, the market failed to get it through the 6,400 resistor line. The trading was also drowsy, as the lapse in thin value showed. Overall, market confidence remains low.
He said that market sentiment is expected to remain bearish this week due to shocks in global trade developments.
“From a positive point of view, our latest inflation printing may raise hope for a more positive policy relief in Bangkok’s Sentral Ng Pilipinas (BSP), which in turn may give the market a boost. Investors are also expected to digest our labor market data as it will give us clues to the strength of the local economy,” said Mr Tantiangco.
The Philippines’ headline inflation fell to 1.3% from 1.4% in April, compared with 3.9% the same month last year. This is the lowest inflation rate in five and a half years, or since the 1.2% print release in November 2019.
Meanwhile, the unemployment rate rose to 4.1% in April from 3.9% in March.
“From the chart, it is observed that local markets trade within the 50-day and 200-day exponential moving average (EMA). Breakouts over 200-day EMA will strengthen the situation of sustainable gatherings, but breakouts below 50-day EMA may lead to further retreats that may lead to 6,150 support.
Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in an email that the next secondary support for PSEI is 6,290 to 6,300, while its direct resistance is 6,500.
For part of it, 2tradeasia.com puts the immediate support of PSEI at 6,300 with a resistance of 6,500-6,550.
“As the positive rationale starts important again, as market entry may be late, high-risk-the situation with the Primean regime, factor allocation may tend toward earnings elasticity and low volatility,” it said. “Agility remains key to the third quarter due to potential regime changes; favoring liquidity and reconsidering exposure to high duration equity.” – Revin Mikhael D. Ochave
