Stocks seen to track global events

MANILA, Philippines — Global developments are expected to dictate the direction of the local stock market this week.

The benchmark Philippine Stock Exchange index finished a shortened trading week last Thursday at 7,142.96, down by 2.34 percent week-on-week, as caution prevailed ahead of this week’s US elections and Federal Reserve rate decision.

Unicapital head of research Wendy Estacio-Cruz said that investors remained cautious last week due primarily to uncertainties surrounding the US elections tomorrow.

This week, Estacio-Cruz said the index is seen to fluctuate between the 7,100 and 7,300 levels in anticipation of fresh catalysts, including tomorrow’s release of Philippine October inflation data and the FOMC meeting on Nov. 7.

“Global marts are expected to hyper-fixate on Western events this week as guesswork on the US elections conclude just in time for the Fed to deliver what is expected to be its penultimate rate cut for the year,” online brokerage firm 2TradeAsia.com said.

On the local front, investors will continue keeping an eye on corporate earnings results which has so far been the source of positivity for the market.

Philstocks Financial research manager Japhet Tantiangco said with the market still at attractive levels, some bargain hunting may prevail this week.

However, he said that a strong ascent may not be seen yet as the market is still expected to deal with certain headwinds.

“Chartwise, the local market may retest the 7,150 level. If it manages to climb back above this level, it will still be considered as its support while resistance would be at the 7,400 to 7,500 range. If it fails to do so, next support is seen at 7,000,” Tantiangco said.