PSEi may drop as US rolls out reciprocal tariffs

PHILIPPINE SHARES could drop when trading resumes on Wednesday as global markets brace for the unveiling of the Trump administration’s planned reciprocal tariffs.

On Monday, the benchmark Philippine Stock Exchange index (PSEi) rose by 0.54% or 33.28 points to 6,180.72, while the broader all shares index increased by 0.29% or 10.93 points to 3,677.88.

Philippine financial markets were closed on Tuesday in observance of Eid’l Fitr.

“We expect the broader market to trade cautiously with a downward bias, as several key economic and market-moving events unfold. Notably, ‘Liberation Day’ on April 2, when US President Donald J. Trump is set to announce reciprocal tariffs, could introduce additional volatility,” DragonFi Securities, Inc. Equity Research Analyst Jarrod Leighton M. Tin said in a Viber message.

“For ‘Liberation Day,’ investors are hopeful that Trump’s reciprocal tariffs will be moderate, as harsher measures could heighten concerns about US stagflation.”

Asian equities rose on Tuesday following Wall Street’s overnight gains as markets awaited details of Mr. Trump’s reciprocal tariffs, Reuters reported.

Regional stocks found some respite on the first day of April after being battered in March by worries that Mr. Trump’s trade war could trigger stagflation or even a US recession.

Investors are nervously awaiting April 2, a day Mr. Trump has dubbed “Liberation Day,” when he has promised to unveil a massive reciprocal tariff plan.

Meanwhile, the release of March Philippine inflation data on April 4 (Friday) could help boost market sentiment, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“Inflation could slightly ease, and that could support possible 25-basis-point local policy rate cut on April 10,” Mr. Ricafort said.

Headline inflation likely settled within 1.7% to 2.5% last month, the Bangko Sentral ng Pilipinas said on Monday. If realized, this would be slower than the 3.7% inflation print in March 2024.

A ����ý poll of 18 analysts conducted last week yielded a median estimate of 2% for the March consumer price index.

Mr. Tin added that other market catalysts for this week include Philippine labor data and a scheduled speech by US Federal Reserve Chair Jerome H. Powell.

“Despite market uncertainty and a general downward bias, we see strong opportunities in defensive sectors. Investors are likely to seek stability in sectors that hedge against uncertainty, including utilities real estate investment trusts, telecommunications, and even gold miners,” he said. “In this uncertain landscape, defensive positioning remains key.”

Mr. Ricafort put the PSEi’s support at 6,000 and minor resistance at 6,275-6,530. — Revin Mikhael D. Ochave with Reuters