Stocks to move sideways as market seeks leads

PHILIPPINE SHARES may move sideways this week as investors await companies’ financial results and developments between the United States and Iran.

On Friday, the Philippine Stock Exchange index (PSEi) rose by 0.9% or 57.97 points to end at 6,465.12, while the broader all shares index went up by 0.65% or 23.36 points to close at 3,570.68.

Week on week, the PSEi climbed by 80.54 points from its Feb. 13 finish of 6,384.58.

“The local bourse reclaimed the 6,400 spot [last] week, buoyed by Bangko Sentral ng Pilipinas’ (BSP) 25-bp (basis point) rate cut, a necessary catalyst to offset lingering growth concerns and cautious risk appetite,” 2TradeAsia.com said in a market note.

“The local market bounced back last week as the BSP’s anticipated rate cut fueled positive sentiment. However, the thin value turnover shows that investors are still keeping a degree of caution amid lingering uncertainties, especially towards the local economy’s outlook,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

On Thursday, the BSP’s policy-setting Monetary Board slashed benchmark borrowing costs by 25 bps for a sixth straight meeting, bringing its key rate to an over three-year low of 4.25%, as expected by all 16 analysts in a ����ý poll.

It has now reduced rates by a total of 225 bps since it began its easing cycle in August 2024.

BSP Governor Eli M. Remolona, Jr. said future easing will largely depend on how soon confidence will recover, as weak sentiment has affected demand, making the output gap bigger.

“We’re now in a situation where it’s more conditional on what happens to confidence and growth,” he said in a briefing after Thursday’s meeting. “We support growth, and we do want growth. But at the same time, our main mandate is still inflation. So, to the extent we can support growth without causing inflation, we will support growth.”

On Friday, he said that with inflation under control, they have room to help stimulate domestic demand, although they face a “large element of uncertainty.”

“We are at the point where monetary policy cannot do much more, but things are very uncertain,” the BSP chief said.

For this week, Mr. Tantiangco said investors will wait for leads.

“In particular, investors are expected to look out for upcoming fourth-quarter and full-year 2025 corporate reports. Strong results may help the market in advancing further,” he said. “Investors are also expected to monitor the developments between the US and Iran. An escalation of tensions mainly via military actions by the US is expected to weigh on the market.”

“Chart-wise, the local market has made it past the 6,400 level again. This week, the validity of this breach is expected to be tested. If the market holds ground above 6,400, this will be considered as its new support, while next resistance is seen at 6,550.”

For its part, 2TradeAsia.com placed the PSEi’s immediate support at 6,300, secondary support at 6,100, and resistance at 6,500. — Alexandria Grace C. Magno