PSEi to move sideways before US GDP, PCE data

The main index may move sideways this week as the market is expected to take cues from the release of key US and Philippine economic data.

The benchmark Philippine Stock Exchange index (PSEi) went down by 7.33 points or 0.11% on Friday to end at 6,503.54, declining for the fourth consecutive day. while the broader all shares index rose by 0.57 point or 0.01% to finish at 3,451.78.

Week on week, the PSEi fell by 139.64 points or 2.1% from its 6,643.18 close on Jan. 12.

“Profit-taking characterized [last] week’s sessions, amid increasing concerns of escalating geopolitical tensions,” online brokerage firm 2TradeAsia.com said in a market report.

“The PSEi declined for the fourth consecutive day after global crude oil prices hovered among three-week highs recently amid increased tensions in the Red Sea area that could lead to higher shipping costs and some shipping delays in the Asia-Europe shipping route due to longer route around Africa, instead of the short cut through Suez Canal via the Red Sea,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort likewise said.

Missile attacks in Syria, Lebanon, Iraq, and Yemen on Saturday threw into sharp focus the increasing risk of the war in Gaza triggering a wider regional conflict pitting Iran and its allies against Israel and the United States, Reuters reported.

Iran said five of its Revolutionary Guards were killed in a missile strike on a house in Damascus which it blamed on Israel, and security sources in Lebanon said an Israeli strike there killed a member of Iran-backed Hezbollah.

Later on Saturday, missiles and rockets launched by Iran-backed militants in Iraq, where such groups have targeted US forces, hit al-Asad air base, the US Central Command said.

The United States also said it had targeted a missile the Iran-backed Houthi group in Yemen was aiming into the Red Sea, which it called a threat to shipping.

For this week, AB Capital Securities, Inc. Vice-President Jovis L. Vistan said in a Viber message that the market will remain in a “corrective mode,” with the PSEi expected to test its 6,500 support ahead of the release of US personal consumption expenditures (PCE) price index data on Friday.

“This week, markets will be taking their cues from the latest US GDP (gross domestic product) and home sales data. The Philippines will also be releasing fourth quarter growth figures,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

Fourth quarter and full-year 2023 US and Philippine GDP and data will be released on Thursday.

2TradeAsia.com put the PSEi’s support at 6,400 and resistance at 6,700. 

“The market failed to revisit the 6,700 level, and is currently retesting 6,500,” it said.

Meanwhile, Mr. Ricafort placed the PSEi’s immediate major support at 6,215-6,310 and its next resistance at the 6,600 level. — RMDO with Reuters