PHILIPPINE STOCKS might experience sideways movement this week as market participants anticipate the results of the US Federal Reserve’s inaugural policy meeting for 2025 and the publication of the fourth quarter and full-year 2024 Philippine gross domestic product (GDP) statistics.
The benchmark Philippine Stock Exchange index (PSEi) declined by 1.29% or 82.66 points to settle at 6,296.20 on Friday, while the wider all shares index fell by 0.64% or 24 points to 3,681.34.
On a week-to-week basis, the PSEi decreased by 0.88% or 55.92 points from the 6,352.12 close on Jan. 17, marking its third consecutive week in decline.
“The local market is experiencing a three-week downward trend as pessimistic sentiment persists due to concerns regarding the US’ intended protectionist measures and the potential for the Philippines not achieving its 2024 economic growth objectives,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco stated in a Viber message.
“Increasing global economic strain has prevented local stocks from trading above 6,400 ahead of the Fed’s meeting [this] week,” online brokerage 2TradeAsia.com described in a market update. “As anticipated, the news cycle has predominantly revolved around President Donald J. Trump’s policy alterations and the adaptations other countries are making to mitigate output damage.”
For the upcoming week, Mr. Tantiangco noted that the market’s attention would be centered on the Fed’s policy evaluation and the Philippine GDP release. The US central bank is set to conduct its two-day meeting on Jan. 28-29, while the Philippine Statistics Authority will unveil fourth quarter full-year 2024 GDP figures on Jan. 30 (Thursday).
“Achieving GDP growth that meets the government’s target could provide the market with a boost [this] week. Conversely, growth that falls short of 2023’s 5.6% may weigh down the market. On the other hand, a Fed rate cut accompanied by a dovish perspective on US monetary policy could elevate the market,” he explained.
“Given that the market is at appealing levels, we might witness some bargain hunting during [this] week’s trading sessions. Nonetheless, we do not foresee a vigorous rally just yet as investors continue to await triggers.”
He identified the PSEi’s support at 6,150 and resistance at 6,400.
National Economic and Development Authority Secretary Arsenio M. Balisacan remarked last week that Philippine economic growth in 2024 may have fallen short of the government’s 6%-6.5% target due to the typhoons that struck the nation in the fourth quarter.
Philippine GDP growth averaged 5.8% during the first nine months of 2024. The economy would have needed to grow by at least 6.5% in the fourth quarter to reach the lower limit of the government’s objective.
In his assessment, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort set the market’s support at 6,300 and resistance at 6,500-6,600.
2TradeAsia.com indicated the PSEi’s immediate support at 6,000-6,100 and resistance at 6,400.
“The 6,300-6,400 range has consistently been a critical zone for the PSEi from a technical analysis standpoint,” it mentioned, adding that this week’s Fed decision could influence this trend. — Revin Mikhael D. Ochave
