The benchmark Philippine Stock Exchange index (PSEi) almost breached the 7,000 mark, rising 114.59 points, or +1.7 percent week-on-week, closing the four-day trading week at 6,961.96, a new 4.5-month high since April 1’s record at 6,979.81.
The last time it broke the mark was on Feb. 3, 2023, at 7,027.38.
Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort attributed the gains to the continued appreciation of the peso against the US dollar at P56.333 to $1 last August 23.
On the other hand, Philstocks Financial Inc. senior research analyst Japhet Tantiangco said the bourse was having a difficult time getting past its 7,000 resistance level but noted the local market could still move with up next week, with “monetary policy easing cues from the [US] Federal Reserve (Fed) in the Jackson Hole Economic Symposium [which] is expected to drive positive sentiment.”
“This is as Fed rate cuts are seen to give more room to the BSP (Bangko Sentral ng Pilipinas) to cut its policy rates, too, thereby increasing the likelihood it will continue with monetary policy easing,” he said.
Online brokerage firm 2TradeAsia.com expressed a similar view, saying “momentum is on the side of the PSEi, getting impetus from the BSP’s ‘ahead of the Fed’ rate cut this month… As more pressure is put on central banks to keep up with what could be rapid-fire Fed rate cuts in late Q3-Q4 (third to fourth quarter), this tailwind should be sustained in the medium-term for the more cyclically aligned PSEi.”
Year to date, the PSEi is up 7.94 percent.
2TradeAsia.com said, “This quarter’s MSCI rebalancing (effective Aug. 31) might cause friction in the near term, but the overall dovish shift in global rates should help sustain the PSEi’s ambition to breach 7,000… Markets are likely at the edge of a new one that resembles pre-pandemic conditions.”
Analysts said immediate support this week would be at 6,700-6,860, while resistance is seen at 7,000-7,100 points.
Trading at the local bourse is closed today, National Heroes Day, and will resume tomorrow.
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