Cautious trading to continue

MANILA, Philippines — Cautious trading is expected to persist this week as investors await fresh catalysts to support a strong rally.

The Philippine Stock Exchange index (PSEi) capped off the first full trading week of 2025 in the red at 6,496.32 last Friday, down by 1.63 percent week-on-week.

DragonFi Securities Inc. analyst Franco Fernandez said investors stayed on the sidelines last week as they waited for fresh leads.

“Looking ahead, the cautious sentiment observed is expected to persist this week. The local market is likely to be influenced by Friday’s US market activity, with its sentiment carrying over into Monday’s session,” Fernandez said.

Unicapital head of research Wendy Estacio-Cruz said the benchmark index is expected to range between 6,400 and 6,600 this week.

“We look forward to the release of Philippine GDP (gross domestic product) growth for the full year to be released on Jan. 30. On the US front, inflation for December is expected to be out on Jan. 15,” she said.

Philstocks Financial research manager Japhet Tantiangco said that last week’s market decline gives opportunities for bargain hunting.

However, he said a strong rally is not yet expected amid lingering risks.

“Investors are expected to watch out for new catalysts. Primarily, investors are expected to watch out for the US’ December 2024 inflation data which is expected to give clues on the Federal Reserve’s policy outlook,” Tantiangco said.

He said the movement of the US’ long term treasury yields may also affect the local market, with a decline in the yields seen helping in lifting the bourse while a rise may weigh on it.

“The peso’s movement could also be another factor on the market’s performance. A strengthening of the peso could help the market while a weakening of the local currency could drag the bourse,” Tantiangco said.

Market support remains at 6,400, while major resistance is seen at 6,800.