Market seeks new leads to maintain momentum

Philippine stocks may move sideways this week as the market looks for fresh leads to maintain its momentum amid lingering uncertainty over the Trump administration’s tariff plans.

On Friday, the bellwether Philippine Stock Exchange index (PSEi) rose by 0.83% or 52.04 points to end at 6,294.11, while the broader all shares index increased by 0.54% or 20.2 points to 3,721.60.

Week on week, however, the PSEi slipped by 0.07% or 4.18 points from the 6,298.29 close on March 7. 

“Local equities seesawed for most of the week as sentiment weighed the impact of local political and economic headlines,” online brokerage firm 2TradeAsia.com said in a market note. “While the macro narrative continues to oscillate widely between inflation-interest rate anxieties and geopolitics, the unfolding of the earnings season shows a sharp contrast: data show outperformance in our monitored sectors, with earnings growth in the double digits.”

For this week, Philippine shares could be range-bound, Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

“The local market is still trying to maintain the upward momentum it started after bottoming on Jan. 31. To keep the uptrend, however, it must surpass its recent high of 6,279.42 touched last March 25. Currently, the market is testing its 50-day exponential moving average,” Mr. Tantiangco said. “At its current position, the market remains undervalued, leaving rooms of opportunities for long-term investors.”

“However, downside risks remain, mainly the global economic risks brought by the US protectionist trade policies. On a positive note, the peso has been strengthening recently. A continuation of this is expected to help in sustaining the market’s rise. Investors are also expected to watch out for the remaining fourth quarter and full-year 2024 corporate reports. Strong results are also expected to help in driving the market higher.”

Mr. Tantiangco put the PSEi’s major support at 6,000 and major resistance at 6,400.

For his part, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort placed the PSEi’s support at 6,000 and resistance at 6,300-6,530.

“The PSEi continued to gains after recent political noises remained manageable so far…However, as a matter of prudence, the markets could still be on a wait-and-see mode if there would be risk of political noises in the coming days, but would remain noises for as long as there are no large protest rallies and no other forms of destabilization that could distract the government from more important priorities,” he said via Viber.

2TradeAsia.com put the PSEi’s immediate support at 6,000 and resistance at 6,400.

“Reasons to tilt toward cautious optimism are becoming more opaque, but keep in mind that broader markets remain entrenched in macro uncertainty. March inflation data that could eventually pave way for an April rate cut might provide the escape velocity the PSEi requires to approach 6,500,” it said. — Revin Mikhael D. Ochave