Stock Market Weekly: Still under pressure

WHAT HAPPENED LAST WEEK

The Philippine Stock Exchange index (PSEi) dropped 1.16% week-on-week (w/w) to 6,037.79 (-71.07 points) despite benign September inflation at 1.7% year-on-year (y/y) and improved August unemployment figures at 3.9%.

This came as the Bangko Sentral ng Pilipinas (BSP) surprised investors by cutting the policy rate by 25 basis points (bps) last Thursday, October 9, citing concerns over a slowing economy despite recent improvements in macroeconomic data.

The move narrowed the interest rate differential to 50 bps, leading to a weaker peso. Adding to the cautious tone were worries about the ongoing US government shutdown, which further weighed on sentiment.

WHAT TO EXPECT THIS WEEK

We expect the market to continue trading in the red amid the lack of major local and global macroeconomic data releases.

Additionally, US President Donald Trump’s recent statement on imposing an additional 100% tariff on imports from China starting in November and implementing export controls on critical software may further affect market sentiment.

Investors are also expected to take cues from upcoming Federal Reserve speeches for guidance on the US economy amid the ongoing government shutdown.

Resistance: 6,100/6,200

Support: 6,000/5,900

ANALYSIS

The PSEi declined by 1.16% w/w to close at 6,037.79 (-71.07 points), remaining below all key moving averages after failing to sustain a breakout above the 20-day MA near 6,100.

The index is now approaching the 6,000 support zone. A successful rebound toward the 20-day MA could signal a potential recovery, while a breakdown below support may lead to further downside pressure.

STOCK CALLS FOR THE WEEK

SM Investments Corp. (SM) | BUY ON BREAKOUT | FMSEC TARGET PRICE: PHP 836.00

SM continues to trend lower, testing its 52-week low at PHP 740 after consistent lower highs and lower lows since late 2024. The stock is trading below its 20-day and 50-day moving averages, confirming sustained bearish momentum, with the RSI affirming its oversold condition.

In the near term, bias remains bearish, but we recommend accumulating once SM reclaims PHP 810 (50-day MA) to confirm recovery. Aggressive investors may consider entering earlier on a decisive break above PHP 760 (20-day MA).

Accumulating SM once it breaks above PHP 760 or PHP 810 is advisable. Take profits 10% above entry price and set stop-loss limits 5% below entry price.

Ayala Corp. (AC) BUY | FMSEC TARGET PRICE: PHP 540.00

AC broke below its long-term channel, registering its lowest price since the pandemic crash at PHP 476. It is trading below key moving averages (200-day, 100-day, and 50-day), with momentum indicators RSI and MACD at oversold levels.

While demand remains benign, AC is hovering at long-term support levels, which we see as favorable entry points, especially for long-term holders.

Accumulate AC should price reach PHP 470.00. Take profits at PHP 540.00 and set stop-loss below PHP 430.00.

Robinsons Retail Holdings, Inc. (RRHI) | BUY | FMSEC TARGET PRICE: PHP 37.08

RRHI is trading below all key moving averages (20-day, 50-day, 100-day, and 200-day), indicating weakness in the stock. Momentum indicators are also bearish, with the RSI approaching the oversold zone and the MACD slightly below the signal line, reinforcing a cautious outlook.

However, the proximity to support might signal a potential rebound. Accumulating RRHI on the support level at PHP 33.71 is advisable. Take profits at PHP 37.08 and set stop-loss limits at PHP 32.02.

KEY DATA RELEASES

1) PH Cash Remittances for August 2025 on Thursday, October 16, 2025 (previous: USD 3.2 billion)

2) US Initial Jobless Claims for September 2025 on Thursday, October 16, 2025 (estimates: 223K; previous: 218K)

3) US PPI for September 2025 on Thursday, October 16, 2025 (previous: 149.16)

(First Metro Securities Disclaimer: We obtain our information from sources we believe are accurate and reliable, but we cannot guarantee its completeness or accuracy. Our content consists of opinions, not investment recommendations, and you should perform your own research before making any investment decisions. First Metro Securities is not liable for any losses or damages resulting from the use of this information.)

(Metrobank Disclaimer: This is general investment information only and does not constitute an offer or guarantee, with all investment decisions made at your own risk. The bank takes no responsibility for any potential losses.)