PHILIPPINE STOCKS could extend their climb this week as trading volumes normalize and as the market awaits the release of key economic data.
On Friday, the Philippine Stock Exchange index (PSEi) rose by 0.81% or 53.42 points to end at 6,603.81, while the broader all shares index increased by 0.8% or 30.38 points to 3,785.48.
Week on week, the PSEi went up by 1.15% or 75.02 points from its 6,528.79 close on Dec. 27.
“Local gauges were little changed during the two-day trading week, with most participants returning from the extended holiday break,” online brokerage firm 2TradeAsia.com said in a note.
Philippine financial markets were closed for holidays on Dec. 30, Dec. 31, and Jan. 1.
“The local market has been showing positive signs after bouncing from its support at 6,400 last Dec. 20, 2024. The market has been up five out of the last six trading days. It also managed to get past its 10-day exponential moving average, which has been considered as a dynamic resistance. However, as seen in the first trading week of the year, trading is still thin, implying tepid conviction,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.
For this week, the market’s movement will depend on key economic reports, he said.
“Eyes are going to be on the Philippines’ December inflation data as this will provide clues on the BSP’ (Bangko Sentral ng Pilipinas) policy outlook. An inflation print within the BSP’s 2.3%-3.1% forecast range forecast, especially one biased to the lower end, may give sentiment a boost this week. Investors are also expected to look forward to the country’s November 2024 labor force survey for clues on the strength of the local economy,” Mr. Tantiangco said.
The Philippine Statistics Authority will release December and full-year 2024 inflation data on Jan. 7 (Tuesday) and the November labor force survey results on Jan. 8 (Wednesday).
“Investors may also monitor the performance of the local currency against the US dollar. An appreciation of the peso may help lift the market while a depreciation is expected to lead to the opposite,” he added.
Mr. Tantiangco put the PSEi’s support at 6,400 and resistance at 6,800.
For his part, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort placed the market’s support at 6,500 and resistance at 6,635-6,820.
Meanwhile, 2TradeAsia.com pegged the PSEi’s immediate support at 6,400-6,500 and resistance at 6,700.
“‘Cloudy with a chance of rain’ has been thematic of the last few weeks of 2024; markets went into 2025 with umbrellas out and risk aversion at full mast… The plays for 2025 are set against a backdrop of numerous uncertainties in the macroeconomy but with excellent valuations at the corporate level. As such, a lot of the central themes for the year are likely sector-locked and/or story-specific to preserve returns amidst swings in the macroeconomy,” it added. — Revin Mikhael D. Ochave
