Philippine stocks may trade sideways this week as players await the outcome of the US Federal Reserve’s first policy meeting for 2025 and the release of the fourth quarter and Philippine Gross Domestic Product (GDP) data.
The benchmark Philippine Stock Exchange Index (PSEI) fell 1.29% or 82.66 points to close at 6,296.20 on Friday, while the broader ALL ALL ALL index fell 0.64% or 24 points to 3,681.34 .
Week on week, the PSEI fell 0.88% or 55.92 points from 6,352.12 on January 17, marking the third consecutive week in the red.
“The local market is already down for three weeks as Bearish Sentiment lingers on concerns over the US’s planned protectionist policies, and the possibility of the Philippines not achieving its 2024 economic growth targets,” Philstocks Financial, Inc. Senior Research Analyst Jaaphet Louis O. Tantiangco said in a Viber message.
“Mounting global economic pressures kept local stocks from trading above 6,400 ahead of Fed meeting [this] Week,” online brokerage firm 2tradeasia.com said in a market note. “As expected, the news cycle thus far has been dominated by President Donald J. Trump’s policy shifts and the adjustments the rest of the world is participating in to minimize damage to output.”
For this week, Mr. Tantiangco said the market’s focus will be on the Fed’s policy assessment and the Philippine GDP report. The US Central Bank will hold its two-day meeting on January 28-29, while the Philippine Statistics Authority will release fourth quarter GDP data on January 30 (Thursday).
“GDP growth that hits the government target could boost the market [this] week. However, 2023’s 5.6% growth could weigh on the stock market. Meanwhile, a Fed rate merge with a dovish outlook for US monetary policy could send the market higher,” he said.
“With the market at attractive levels, we may see some bargain hunting [this] week trading. However, we do not expect a strong rally yet as investors continue to wait for catalysts. “
He set PSEI support at 6,150 and resistance at 6,400.
National Economic and Development Authority Secretary Arsenio M. Balisacan said last week that Philippine economic growth in 2024 may have fallen short of the government’s 6%-6.5% target due to the typhoons that hit the country in the fourth quarter hit.
Philippine GDP growth averaged 5.8% in the first nine months of 2024. The economy would need to expand by at least 6.5% in the fourth quarter to reach the low end of the government’s target.
For its part, Rizal Commercial Banking Corp. chief economist Michael L. Ricafort the market’s support at 6,300 and resistance at 6,500-6,600.
2Tradeasia.com puts PSEI immediate support at 6,000-6,100 and resistance at 6,400.
“The 6,300-6,400 zone has always been a critical zone for the PSEI from a chart point,” it said, adding that the Fed’s decision this week could influence this trend. – Revin Mikhael D. Ochave