PHILIPPINE SHARES are expected to move sideways in the coming days as investors await the details of the initial US debt ceiling deal reached over the weekend.
The Philippine Stock Exchange index (PSEi) fell by 30.02 points or 0.45% to close at 6,530.20 on Friday, while the broader all shares index went down by 8.71 points or 0.24% to end at 3,488.08.
Week on week, the PSEi likewise declined by 134.35 points or 2.02% from its close of 6,664.55 on May 26.
“The local bourse dropped by 30.02 points to 6,530.20 as investors booked more gains on the last trading day of the week to avoid any uncertainties over the weekend, particularly with the ongoing worries over the US debt ceiling,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in Viber message.
For this week, the debt limit deal will continue to be top of mind for investors in the Philippines, Unicapital Securities, Inc. Senior Equity Research Analyst Carlos Angelo O. Temporal said in a Viber message.
“Material developments regarding the matter could induce some swings in the market, but a firmer outlook on the direction will primarily depend on the actual outcome of the US debt ceiling talks. While a resolution could immediately result in some optimism in the near term, the longer trend of the market will still depend on the content of the deal and its economic implications,” Mr. Temporal said.
“The market may continue to exhibit weakness pending significant progress on negotiations… As such, we suggest to adopt a wait-and-see stance before redeploying capital to veer away from a possible breach of the 6,500 support level,” China Bank Securities Corp. Research Associate Lance U. Soledad said in an e-mail.
US President Joseph R. Biden and top congressional Republican Kevin McCarthy reached a tentative deal to suspend the federal government’s $31.4-trillion debt ceiling on Saturday evening, ending a months-long stalemate, Reuters reported.
The deal would suspend the debt limit through January of 2025, while capping spending in the 2024 and 2025 budgets, claw back unused COVID funds, speed up the permitting process for some energy projects and includes some extra work requirements for food aid programs for poor Americans.
After months of back-and-forth, the tentative agreement came together in a flurry of calls. Mr. Biden and Mr. McCarthy held a 90-minute phone call earlier on Saturday evening to discuss the deal, Mr. McCarthy briefed his members later in the evening, and the White House and the House leader spoke afterward.
The deal will avert an economically destabilizing default, so long as it succeeds in passing it through the narrowly divided Congress before the Treasury department runs short of money to cover all its obligations, which it warned on Friday will occur if the debt ceiling issue was not resolved by June 5. — By A.H. Halili with Reuters
This article originally appeared on bworldonline.com