PSEi seen range-bound, awaiting rate hints
Investors may stay on the sidelines in the coming days as they await policy signals from the Bangko Sentral ng Pilipinas (BSP) and the US Federal Reserve (Fed).
F. Yap Securities Inc. said it expects markets to remain cautious amid lingering inflation and geopolitical risks.
In its latest market outlook, the brokerage said the local market’s next direction would largely depend on the outcome of the two central bank meetings. While the BSP was widely expected to deliver a 25-basis-point rate cut, the Fed was seen keeping rates unchanged.
“Taking into consideration all the aforementioned factors, investors are advised to accumulate shares with caution. The trading range is seen from 6,000 to 6,150,” Philstocks Financial Inc. research manager Japhet Tantiangco said.
F. Yap said a brief midweek rebound was cut short by renewed worries over US-Iran hostilities and the risk of slower economic growth, coupled with persistent inflation.
The firm noted that inflation concerns remain a key overhang. It pointed to April unemployment data showing a lower jobless rate of 4.7 percent but a higher underemployment rate of 15.2 percent, which it said reinforced stagflation concerns.
Looking ahead, F. Yap said the BSP faces a difficult balancing act between supporting growth and containing inflation pressures. While a 25-basis-point cut remains the preferred outcome for market stability, the brokerage warned that a more aggressive policy move could increase volatility.
A 25-basis-point BSP cut combined with a steady Fed outlook could help the PSEi build support around the 6,000 level. However, a more hawkish outcome from either central bank could push the benchmark index back toward the 5,750 to 5,800 range.
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