PHILIPPINE STOCKS may remain weak this week as market sentiment remains cautious with newly elected US President Donald J. Trump taking office on Monday and no new catalysts.
On Friday, the Philippine Stock Exchange index (PSEi) rose 1.38% or 86.60 points to 6,352.12, while the broader all-stock index rose 0.76% or 27.95 points to 3,703.73.
However, week on week, the PSEi fell 2.22% or 144.20 points from 6,496.32 on January 10, marking the second weekly decline in a row.
“Local stocks followed regional peers and succumbed to profit-taking ahead of Trump’s inauguration. Shaky global capital markets were gripped by political-economic fears,” online brokerage 2TradeAsia.com said in a market note. “Beyond the uncertainties on trade, immigration and taxes, the overall well-being of the U.S. economy has sent pain signals to the rest of the world.”
“The local market has become more bearish as the decline has continued. At the same time, the market has fallen below the 6,400 level, which previously served as a support line,” said Senior Research Analyst Japhet Louis O. Tantiangco of Philstocks Financial, Inc. in a Viber message.
This week, the benchmark index fell twice to the 6,200 level after the release of major US inflation reports prompted markets to recalibrate their expectations of Federal Reserve easing.
On Thursday, the PSEi fell to 6,265.52, which was the lowest close in almost seven months or since closing at 6,158.48 on June 21, 2024.
This week, Mr. Trump’s inauguration is likely to be a major source of leverage for the market, said Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp. in a Viber message.
“We still expect the cautious atmosphere at the local fair to continue amid the lack of new leads. Investors are expected to wait for new catalysts. Until then, signals are expected to emerge from other financial markets,” Mr Tantiangco said.
“We may also see periods of bargain hunting as the local market is still fundamentally at attractive levels,” he added, estimating PSEi support at 6,150 and resistance at 6,400.
2TradeAsia.com, in turn, placed the market’s support at 6,000 and resistance at 6,500.
Trump arrived in the Washington area on Saturday evening for a celebration of his return to power, Reuters reported.
In the Capitol Rotunda, Mr Trump will be sworn in at 12pm GMT and then deliver an inaugural address, a speech that usually sets the tone for the president’s four-year term in office. He told NBC News that the theme would be ‘unity and strength,’ and would also include the word ‘honesty.’
Once he returns to the White House on Monday afternoon, Mr. Trump is expected to begin signing dozens of executive orders and directives to crack down on migration, boost U.S. energy production and other priorities. — Revin Mikhael D. Ochave of Reuters