Philippine stocks are expected to move sideways this week, with a downward bias as investors may take profits from a strong rally.
Philstocks Financial Inc. research head Japhet Tantiangco said the market could see some episodes of profit-taking, following the three-week rally.
“However, the market may still see the week on positive note as the dovish monetary outlook of the Bangko Sentral ng Pilipinas [BSP[ and the US Federal Reserve may uphold optimism,” Tantiangco said.
The continued strengthening of the peso against the dollar is also boosting the market’s upward momentum.
Among the key indicators the market would watch out for this week are the BSP’s business and consumer expectations survey. The market’s support is seen at 7,150 this week, while resistance is at 7,400.
Online brokerage firm 2TradeAsia.com said that with a clear path towards lower rates, investors should take position on stocks that would benefit from lower interest rates.
The Philippine Stock Exchange index (PSEi) last week hit the 7,200 level, the first time since 2022 after the Fed implemented a 50-basis-point rate cut and the BSP reduced the local reserve requirement ratio.
“The cutting cycle has officially started in the post-pandemic era and over a year since the ‘higher-for-longer’ rhetoric has been noted in Fed minutes,” 2TradeAsia.com said.
The PSEi surged, 229 points, or 3.27 percent week-on-week to close at 7,252 Friday. All sectors rallied, led by mining, financials and holdings.
Average value turnover improved to P8.38 billion, while average net foreign buying increased to P941 million.
Top performing stocks include Nickel Asia Corp., Ayala Corp. and Universal Robina Corp.
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