Eyes on the US elections this trading week
All eyes will be trained on the West this week as stock markets—not just the Philippines—watch out for the results of the US presidential elections and the Federal Reserve’s latest policy strategy.
Despite stellar earnings results from the country’s top banks, the benchmark Philippine Stock Exchange Index (PSEi) dipped by 2.34 percent to close last week at 7,142.96.
This is already down 5.5 percent from its recent peak of 7,554.68 on Oct. 7 following an inflation slowdown in September.
Analysts say that the US elections on Wednesday (Manila time) will likely steer the market this week.
“The upcoming US elections bring some uncertainty, especially with the possibility of a leadership shift,” Jayniel Carl Manuel, equities trader at Seedbox Securities Inc., said in an email, referring to a possible Donald Trump victory.
Manuel pointed out that Trump’s favorable stance on cryptocurrency could hurt stock markets, as funds may veer away from equities.
The American central bank will also be a key catalyst this week, as it is set to meet on Thursday to decide on its latest monetary policy stance, according to Unicapital Securities Inc. research head Wendy Estacio-Cruz.
Back at home, traders are anticipating another interest rate cut in December after the Bangko Sentral ng Pilipinas recently hinted at slashing key rates by another 25 basis points.
Cruz sees the PSEi fluctuating within the 7,100 and 7,300 range this week in anticipation of fresh catalysts.
Trading platform 2TradeAsia.com sees 7,000 as the bourse’s immediate support, while resistance will be at 7,500.
