Sideways trading seen this week

The Philippine Stock Exchange index closed the week in positive territory at 6,478.44, up 3.91 percent week-on-week.
Pixabay

MANILA, Philippines —  Local stocks may trade sideways this week as investors are likely to tread with caution.

Japhet Tantiangco of PhilStocks Financial said the policy easing prospects of the US Federal Reserve may still provide support to the local bourse this week.

“However, we advise caution as the market’s steep rally last week opens the possibility of profit taking,” he said.

Tantiangco said investors may also digest the results of the Bangko Sentral ng Pilipinas (BSP)’s latest consumer and business confidence surveys indicating less upbeat sentiment on the economy’s future.

“Finally, the BSP’s still tight policy outlook may weigh on sentiment. Given these, the market could move sideways next week,” he said.

Tantiangco pointed out that the local market had a good run last week, particularly the last two trading days which were backed by strong trading activity.

He said the US Fed’s signal of three possible 25-basis-point rate cuts next year proved to be a strong catalyst that can spur market optimism.

The Philippine Stock Exchange index closed the week in positive territory at 6,478.44, up 3.91 percent week-on-week.

2TradeAsia.com said average market turnover last week improved by 30 percent week-on-week to P10.2 billion, with foreigners turning into net sellers to P15 million on average from P18 million average net buying the previous week.

“Markets hyper-fixated on interest rate cycle shifts tend to gyrate heavily in tandem with macro headlines; take advantage of rallies to make quick profit off short-term trades, but do not lose sight of 2024, which is shaping up to be a year with more meaningful and impactful recovery,” 2TradeAsia.com said.

Immediate support for this week is seen at 6,200 to 6,300, while resistance is at 6,600.

Show comments