PHILIPPINE SHARES may trade sideways this week as players await the outcome of the US Federal Reserve’s first policy meeting for 2025 and the release of fourth quarter and full-year 2024 Philippine gross domestic product (GDP) data.
The benchmark Philippine Stock Exchange index (PSEi) sank by 1.29% or 82.66 points to close at 6,296.20 on Friday, while the broader all shares index dropped by 0.64% or 24 points to 3,681.34.
Week on week, the PSEi fell by 0.88% or 55.92 points from the 6,352.12 close on Jan. 17, marking its third straight week in the red.
“The local market is already on a three-week decline as bearish sentiment continues to linger driven by worries over the US’ planned protectionist policies, and the possibility of the Philippines not hitting its 2024 economic growth target,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.
“Mounting global economic pressure kept local equities from trading above 6,400 ahead of the Fed’s meeting [this] week,” online brokerage firm 2TradeAsia.com said in a market note. “As expected, the news cycle has been so far dominated by President Donald J. Trump’s policy shifts and the adjustments the rest of the world are partaking to minimize damage to output.”
For this week, Mr. Tantiangco said the market’s focus will be on the Fed’s policy review and the Philippine GDP report. The US central bank will hold its two-day meeting on Jan. 28-29, while the Philippine Statistics Authority is set to release fourth quarter full-year 2024 GDP data on Jan. 30 (Thursday).
“GDP growth that hits the government’s target may give the market a boost [this] week. However, growth slower than 2023’s 5.6% may weigh on the bourse. Meanwhile, a Fed rate cut together with a dovish outlook for the US’ monetary policy may push the market higher,” he said.
“With the market at attractive levels, we may see some bargain hunting in [this] week’s trading. However, we do not expect a strong rally yet as investors continue to wait for catalysts.”
He put the PSEi’s support at 6,150 and resistance at 6,400.
National Economic and Development Authority Secretary Arsenio M. Balisacan last week said that Philippine economic growth in 2024 may have fallen short of the government’s 6%-6.5% target due to the typhoons that hit the country in the fourth quarter.
Philippine GDP growth averaged 5.8% in the first nine months of 2024. The economy would have needed to expand by at least 6.5% in the fourth quarter to meet the low end of the government’s goal.
For his part, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort placed the market’s support at 6,300 and resistance at 6,500-6,600.
2TradeAsia.com put the PSEi’s immediate support at 6,000-6,100 and resistance at 6,400.
“The 6,300-6,400 zone has always been a critical zone for the PSEi from a charting standpoint,” it said, adding that the Fed’s decision this week could affect this trend. — Revin Mikhael D. Ochave
