PH shares seen to trade with upside bias this week
Philippine stocks may still show strength this week and challenge the 6,200 main index level amid investors’ renewed optimism, although political issues and growth risks could still weigh on sentiment.
By the end of the trading session last Friday, the Philippine Stock Exchange Index returned to the 6,000 mark as investors continued to cheer the policy rate cut of the Bangko Sentral ng Pilipinas (BSP).
This move came as the country logged cooler inflation, giving the BSP more room to implement another slash in rates.
Central banks usually ease interest rates to help prop up a sluggish economy. With cheaper borrowing costs, businesses and consumers take out more loans and increase their spending for big purchases, such as cars and homes.
According to Rastine Mercado, China Bank research director, the local bourse is “positioned for a potential continuation rally after closing above 6,000.”
“We may see the index take pause early next week, given the proximity to the 6,065 to 6,100 resistance. However, sustained positive sentiment could eventually provide momentum for a fresh rally—possibly towards the 6,200 level,” Mercado said.
Catalysts
Near-term catalysts could be from upcoming US data releases, which could boost appetite globally, said Mercado.
Toby Allan Arce, head of sales trading at Globalinks Securities and Stocks Inc., echoed such an outlook.
Immediate support is pegged at 5,900 to 6,000.
Arce said the market may embrace a “cautiously optimistic” stance while awaiting how these BSP policy movements would feed into economic momentum by year-end.
“Investors are likely to adopt a more discerning stance in the short term, awaiting clearer evidence that policy easing can meaningfully counter slowing domestic growth and subdued business confidence,” Arce said.
Both analysts cited lingering concerns about economic growth, including the current political ruckus, that could stifle further gains.
“The peso’s movement will also be critical; any renewed weakness against the US dollar may dampen foreign investor participation,” Arce said.
