Philippine stocks are expected to sustain their upward momentum in this shortened trading week, as the probability of interest rate cut by the US Federal Reserve increased based on the July meeting minutes.
Financial markets will be closed Monday to celebrate the National Heroes’ Day.
Online brokerage firm 2TradeAsia.com said the July Feb minutes meeting showed that officials were more unanimous towards easing on stabilizing inflation rate.
“August inflation data, plus jobs data should solidify the magnitude with which the Fed should move for the rest of the year,” 2TradeAsia.com said.
Analysts expect the Fed to implement two to three rate cuts between September to December, which could bring down interest rate to between 4.50 percent and 4.75 percent, assuming a 75-basis-point reduction.
“As more pressure is put on central banks to keep with what could be rapid fire Fed rate cuts in late Q3 to Q4, this tailwind should be sustained in the medium-term for the more cyclically-aligned PSEi,” 2TradeAsia.com said.
The market’s support is seen at 6,800 this week, resistance at 7,000 to 7,050.
The bellwether Philippine Stock Exchange index shot up by 1.67 percent last week to close at 6,962.96, while the broader all-shares index jumped 1.58 percent to 3,749.73.
Except for the property index which declined by 1.5 percent, all sub-indices ended in the green.
Average daily value turnover improved to P6.93 billion, while foreign investors were net buyers, with total net inflows reaching P6.36 billion, up from previous week’s net inflow of P1.77 billion.
The benchmark index was up 7.96 percent since the start of the year.
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