Upward bias seen as market targets 7,000

September 9, 2024 | 12:00am

MANILA, Philippines — The local market is expected to make another push toward the 7,000 level this week, fueled by the momentum gained from a slower August inflation reading.

Analysts expect the market to continue moving with an upward bias over the coming days after the benchmark Philippine Stock Exchange index (PSEi) finished last Friday at 6,936.09, up by 0.56 percent week-on-week.

“The PSEi may continue its rally following the better-than-expected inflation figure in August,” Unicapital head of research Wendy Estacio-Cruz said.

“Additionally, there is an increasing likelihood that the US Federal Reserve will cut interest rates during its FOMC meeting on Sept. 17 to 18, given the slowing US economy,” she said.

Estacio-Cruz said US inflation data for August is also set to be released this week.

“If this falls short of expectations, it could solidify the case for a Fed rate cut in September,” she said.

Last week, share prices were boosted by the slower Philippine August inflation which eased to 3.3 percent from the previous month’s 4.4 percent.

Philstocks Financial research manager Japhet Tantiangco said that while the market showed that it still respects the 6,700 to 6,800 support range, it is still unable to get past the 7,000 resistance line.

He said a downside risk this week is if more evidence is seen pertaining to the weakening of the US economy.

“From a fundamental standpoint, the market remains undervalued. Hence, we still see room for bargain hunting,” Tantiangco said.

“However, worries over the health of the US economy is seen as a headwind for the bourse. This week, investors are expected to monitor this narrative,” he said.

On a positive note, Tantiangco said the latest inflation figures are seen to strengthen the case for the continuation of the monetary policy easing by the Bangko Sentral ng Pilipinas.

“This in turn is seen to drive optimism in the market. Also, the local currency has recently exhibited appreciation against the US dollar. If this continues, it is also expected to give the market a boost,” he said.