Philippine Stock Market
The Philippine stock market may experience a period of sideways movement this week, prior to the US Federal Reserve’s policy meeting. This meeting is highly anticipated, as the Federal Reserve is expected to implement a rate cut. Additionally, concerns regarding corruption within the country may impact the market.
Recent Market Performance
On Friday, the Philippine Stock Exchange index (PSEi) declined by 0.28%, or 17.68 points, to close at 6,109.21. The broader all shares index also dropped by 0.16%, or 6.14 points, to 3,685.59. Over the week, the PSEi decreased by 39.92 points from its previous close of 6,149.13 on September 5. This marks the fifth consecutive week of decline for the PSEi.
Factors Influencing the Market
The market’s relatively flat performance last week can be attributed to the lack of significant domestic catalysts. Although US inflation was lower than expected, which boosted hopes for near-term Federal Reserve rate cuts, the Philippine market has shown little reaction. In contrast, US equities rallied to fresh record highs, with the S&P 500, Nasdaq, and Dow all advancing due to easing inflation, which reinforced optimism for a more accommodative policy stance.
US Federal Reserve’s Policy Meeting
The US Federal Reserve’s policy meeting, scheduled for Tuesday and Wednesday, is a major focus for investors. Traders anticipate the central bank to cut interest rates by 25 basis points (bps) following recent data showing longstanding weakness in hiring and easing inflation concerns. Interest rate futures reflect expectations of cuts totaling 75 bps by the end of the year. The Fed has maintained its target rate at the 4.25%-4.5% range since December 2024.
Local Political Headlines
Local political headlines regarding controversies from flood control projects were negated by expectations for the Fed’s policy easing this week, leading to flat gauges. For this week, the Fed’s meeting will be in the spotlight. The government’s intensified anti-corruption push further gains momentum, which may impair cold money flows as overseas funds adopt a wait-and-see stance, pending clearer budget transparency and project viability.
Market Forecasts
2TradeAsia.com puts the PSEi’s immediate support at 6,100 and resistance at 6,300 for this week. Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort places the PSEi’s immediate support at 6,105 and resistance between 6,230 and 6,915. Investors are likely to stay cautious amid domestic corruption concerns.
Conclusion
In conclusion, the Philippine stock market is likely to experience sideways movement this week, prior to the US Federal Reserve’s policy meeting. The meeting is highly anticipated, and the expected rate cut may impact the market. Additionally, concerns regarding corruption within the country may also influence investor decisions. As the market awaits the Fed’s decision, investors are advised to remain cautious and monitor local and international developments that may impact the Philippine stock market.
