Stocks to move sideways as market seeks leads

Philippine shares may continue to move sideways as investors search for fresh catalysts, including tariff policy announcements from the Trump administration and listed companies’ financial results.

On Friday, the Philippine Stock Exchange index (PSEi) dropped by 0.39% or 25.31 points to close at 6,339.38, while the broader all shares index fell by 0.22% or 8.65 points to 3,767.41.

Week on week, the PSEi climbed by 0.53% or 33.25 points from its 6,306.13 finish on Aug. 1.

“The PSEi went sideways this week as investors weighed the lift from the second quarter gross domestic product (GDP) and cooling July inflation against global policy uncertainties and potential third quarter growth risks,” online brokerage 2TradeAsia.com said in a market note.

“For the past nine weeks, the local market has been moving alternately between gains and losses. The lack of clear direction reflects investors’ indecisiveness as they continue to weigh mixed factors from prospects of further policy easing by the BSP (Bangko Sentral ng Pilipinas), risks and uncertainties on the US’ protectionist trade policies, and the overall status of the general economy,” Philstocks Financial Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

Philippine GDP expanded by 5.5% in the April-to-June period, slightly faster than the 5.4% growth in the first quarter but slower than the 6.5% expansion in the second quarter last year. This matched the lower end of the government’s 5.5%-6.5% growth target for this year.

For the first half, GDP growth averaged 5.4%, slightly below the government’s goal.

Meanwhile, Philippine inflation slowed to a near six-year low of 0.9% in July from 1.4% in June and the 4.4% print in the same month a year ago. This marked the fifth straight month that it settled below the central bank’s 2-4% target.

Year to date, the consumer price index averaged 1.7%, slightly higher than the BSP’s 1.6% full-year forecast.

For this week, Mr. Tantiangco said the market will look for leads.

“Investors are expected to watch out for updates regarding US President Donald J. Trump’s trade policy plans, primarily on his chips and semiconductor tariffs. Investors are also expected to continue monitoring second quarter corporate reports,” he said. “Prospects of further easing by the BSP following supportive economic data this past week may continue to give the market support.”

“Chart-wise, based on its performance from mid-July to present, the local market is still bearishly biased. To negate this trend, the market must first go above its most recent low (6,222.04 last July 31) and most recent high (6,466.10 last July 24),” he added.

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

“The ongoing second quarter earnings season will serve as a critical period for validating fundamental theses, which have shifted amidst evolving macroeconomic pressures,” it said. — Revin Mikhael D. Ochave