Philippine stocks are expected to move sideways with an upward bias this week as the market attempts to hit the 7,500 resistance level.
Online brokerage firm 2TradeAsia.com said the recent move by the Bangko Sentral ng Pilipinas to cut the reserve requirement ratio for universal and commercial banks by 250 basis points to 7 percent of deposits from 9.5 percent should help support the market’s target.
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“There is historical selling pressure around the benchmark’s current trading range, but the yield curve steepening and dis-inverting should support more consistent inflows as the appeal for bills and short-term securities evaporate relative to riskier assets,” 2TradeAsia.com said.
It said trading could be more volatile as the market enters the final quarter for 2024.
“The fourth quarter tends to have heightened activity as portfolio year-end adjustments coincide with sector and asset rotation that anticipates stories in the succeeding year,” it said.
Among the sectors likely to get noticed by investors are stocks that will benefit from lower interest and inflation rates, including property firms, infrastructure and banks.
Investors may also position ahead of the third-quarter earnings results. The market’s resistance is seen at 7,500 level this week, while support is at 7,100.
The Philippine Stock Exchange index soared by 175 points, or 2.43 percent, to close at 7,428 last week.
All sectors ended in the green, with mining and oil climbing by 3.09 percent and financials by 2.69 percent.
Average value turnover improved to P9.61 percent, while the average foreign buying increased 126 percent week-on-week to P2.13 billion.
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