PHILIPPINE STOCKS are expected to move sideways this week due to bargain hunting and as investors await the Bangko Sentral ng Pilipinas’ (BSP) policy meeting on Thursday.
The Philippine Stock Exchange index (PSEi) went down by 43.75 points or 0.67% to close at 6,405.91 on Friday, while the broader all shares index inched up by 15.19 points or 0.44% to 3,430.19.
Week on week, the PSEi declined by 44.93 points or 0.7% from its close of 6,450.84 on Aug. 4.
“Selling persisted this week, after disappointing Philippine GDP (gross domestic product) growth in the second quarter,” online brokerage 2TradeAsia.com said in a report.
The Philippine economy grew at its slowest pace in the second quarter, dampened by elevated inflation, lingering impact of rising borrowing costs, and a decline in government spending.
In the April to June period, GDP expanded to 4.3% year on year, decelerating from the 6.4% expansion in the first quarter, and the 7.5% print a year earlier, the Philippine Statistics Authority reported last week.
The latest figure was lower than the median estimate of 6% of 21 economists conducted in a BusinessWorld poll.
For the first semester, GDP growth averaged 5.3%, below the government’s 6-7% target.
For this week, the market may see bargain hunting as they await the BSP’s policy review, analysts said.
“With the local market already declining for three straight weeks, we may see bargain hunting in its trading [this] week. However, with the tempered confidence towards the economy following the recent GDP data release, a strong rally would be challenging,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.
“[This] week, investors are also expected to look forward to the Bangko Sentral ng Pilipinas’ policy meeting to see how their reaction and policy outlook would be following the slowdown in our GDP growth in the second quarter. Hints of dovish policies from the BSP may give sentiment a boost,” Mr. Tantiangco added.
A BusinessWorld poll last week showed 12 of 14 analysts see the Monetary Board keeping benchmark rates steady at 6.25% during its fifth policy meeting for the year on Thursday.
2TradeAsia.com added that the Chinese ghost festival may lead to lower trading volume in the coming weeks.
The ghost month is a period in the Lunar calendar when some Asian investors refrain from making big investments or decisions, resulting in lower trading volumes. For this year, it is from Aug. 16 to Sept. 14.
2TradeAsia.com placed the PSEi’s immediate support at 6,350 and resistance at 6,600 to 6,700, while Mr. Tantiangco put support and resistance at 6,400 to 6,600, respectively. — A.H. Halili
This article originally appeared on bworldonline.com