Bearish sentiment is expected to prevail in the coming days given the continuing uncertainties stemming from the Middle East conflict and growing concerns over faster inflation this April.
The Philippine Stock Exchange index (PSEi) comes from a three-day losing skid last week, finishing at 5,943.49 on Friday, down by 0.93 percent week-on-week.
Unicapital Securities head of research Wendy Estacio-Cruz said the PSEi edged lower as the combination of tighter monetary policy and lingering geopolitical risks kept the market largely flat, with investors adopting a wait-and-see approach as they assessed the broader implications on inflation, interest rates and economic growth.
She said the Bangko Sentral ng Pilipinas’ 25-basis-point rate hike last week tempered risk appetite for equities.
‘This week, the PSEi is expected to trade sideways with a slight downward bias, as investors remain cautious amid persistent inflation concerns and the prospect of further policy tightening,’ Estacio-Cruz said.
First Metro Investment Corp. head of research Cristina Ulang, for her part, said the market has its eyes on progress of the next round of US-Iran peace talks.
Ulang said any positive development will reignite appetite, while any setback will keep PSEi trapped in sideways movement around 5,900 to 6,100.
‘Inflation shooting up above five percent in April will weigh on sentiment and drag PSEi lower in the 5,850 to 5,950 range,’ she said.
Philstocks Financial research manager Japhet Tantiangco said the local market is already on a two-week losing streak and is now trading below the crucial 6,000 line.
With the market already giving up its ground at 6,000, Tantiangco said its new support is now seen at 5,800.
However, despite being at a bargain, the local market is still seen to have a bearish default in this week’s trading, he said.
‘Lingering uncertainties on the Middle East war amid the lack of a compromise among the countries involved, and the expectations of rising inflation and interest rates at home are expected to continue weighing on sentiment,’ Tantiangco said.
‘The peso’s weakness, if sustained, is also expected to negatively affect the local bourse. Still, the market’s bearish default could be negated if we see positive developments in the geopolitical tensions in the Middle East,’ he said.
There will be no trading on May 1 in observance of Labor Day.