PHILIPPINE SHARES may rebound this week on bargain hunting as markets await the latest US inflation reports that could affect the pace of the Federal Reserve’s easing cycle.
On Friday, the bellwether Philippine Stock Exchange index (PSEi) fell by 0.23% or 15.25 points to close at 6,496.32, while the broader all shares index declined by 0.06% or 2.44 points to 3,754.85.
Week on week, the PSEi retreated by 1.63% or 107.49 points from the 6,603.81 close on Jan. 3.
“Deceleration in rate easing and global inflation anxieties spilled over to [last] week’s trades… The release of the Fed December minutes spelled the direction of global fund movements [last] week, as it put into paper a lot of market anxieties that are beginning to unfold in 2025,” online brokerage firm 2TradeAsia.com said in a market note.
The reality of US President-elect Donald J. Trump’s election victory on a platform of aggressive tariffs and deportation of some immigrants landed hard at the Federal Reserve’s meeting last month, with US central bank officials raising new inflation concerns and staff suggesting the incoming administration’s plans may slow economic growth and raise unemployment, Reuters reported.
Amid an otherwise sanguine outlook of continually slowing inflation, participants at the Dec. 17-18 meeting “noted that recent higher-than-expected readings on inflation, and the effects of potential changes in trade and immigration policy, suggested that the process could take longer than previously anticipated,” according to minutes of that session released on Wednesday.
That uncertainty, along with the full percentage point in interest rate cuts delivered by the central bank’s policy-setting Federal Open Market Committee in 2024, added to arguments for pausing further reductions in borrowing costs.
For this week, the local market may rise on bargain hunting following last week’s drop, Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.
“However, a strong rally is not yet expected amid lingering risks. This week, investors are expected to watch out for new catalysts. Primarily, investors are expected to watch out for the US December 2024 inflation data, which is expected to give clues on the Federal Reserve’s policy outlook,” Mr. Tantiangco said. He put the PSEi’s support at 6,400 and major resistance at 6,800.
US December producer and consumer price index data will be released on Jan. 14 (Tuesday) and Jan. 15 (Wednesday), respectively.
For his part, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort placed the market’s support at 6,400 and resistance at 6,635-6,820.
2TradeAsia.com put the PSEi’s support at 6,400-6,500 and resistance at 6,800.
“With no sight of a sweeping tide that could rouse the local market, at least in the very short term, brace for volatile trading sessions that have yet to decouple from the Trump-interest rate-inflation news cycle,” it said. — R.M.D. Ochavewith Reuters
