SONA, firms’ results in focus as mart seeks leads

Philippine shares may move sideways this week, with President Ferdinand R. Marcos, Jr.’s fourth State of the Nation Address (SONA) on Monday taking center stage and as investors await more corporate results.

On Friday, the Philippine Stock Exchange index (PSEi) went down by 0.48% or 30.98 points to close at 6,413.18, while the broader all shares index retreated by 0.3% or 11.52 points to 3,796.87.

Meanwhile, week on week, the PSEi jumped by 1.74% or 109.46 points from the 6,303.72 finish on July 18.

“Despite the onslaught of typhoons Dante and Emong, the PSEi remarkably rallied… defying global anxieties over US tariffs,” online brokerage 2TradeAsia.com said in a market note.

“The local market made a comeback last week, regaining its ground above the 6,400 level as bargain hunters take opportunities. However, trading last week was tepid, implying that the climb did not have strong conviction,” Philstocks Financial Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

For this week, the market will look for fresh leads, with the spotlight expected to be on Mr. Marcos’ SONA, he said.

“Detailed plans on how to keep inflation low and how to re-accelerate economic growth may boost investors’ sentiment,” Mr. Tantiangco said.

In the first quarter, Philippine gross domestic product (GDP) grew by 5.4%, weaker than expected and slower than the 5.9% expansion in the same quarter last year.

Economic managers last month lowered the full-year GDP growth target to 5.5%-6.5% from 6%-8% previously.

“Investors are also expected to watch out for the upcoming second quarter corporate reports. Robust results are expected to lift the local market,” he added.

Mr. Tantiangco put the PSEi’s major resistance at 6,600 after the index was able to re-establish support at 6,400 last week.

“However, it is having a hard time securing position above its 200-day exponential moving average (EMA). Moving forward, the 200-day EMA could be tested further,” he said. “The market’s moving average convergence/divergence line is about to cross above the signal line. If this proceeds, it will signal positive momentum for the bourse.”

For its part, 2TradeAsia.com put the PSEi’s immediate support at 6,300 and resistance at 6,600.

“The week ahead demands balancing portfolio resilience against global and local headwinds. We reiterate our call to prioritize high-liquidity, domestically focused valued stocks to navigate near-term risks while capitalizing on BSP’s (Bangko Sentral ng Pilipinas’) supportive policy,” it said. 

“In these trying times, stay vigilant for potential pivots into hedge plays should inflation surprise. Markets favor the prepared — seize opportunities with caution and prudence,” 2TradeAsia.com added. — Revin Mikhael D. Ochave