Stocks likely to climb

MANILA, Philippines — After a lackluster performance of the Philippine stock market last week, investors may return this week unless new negative developments arise, including a worsening of the Israel-Hamas war, analysts said.

The 30-company benchmark Philippine Stock Exchange index is thus seen trading within the 6,150 to 6,420 level this week with potential upside bias, said Juan Paolo Colet, managing director at China Bank Capital Corp.

This, however, may change if there would be new negative surprises, he said.

For now, Colet said investors would be keeping a close watch on the intensifying Israel-Hamas war, as any expansion of the conflict could negatively impact local pump prices.

In addition, market participants will keep track of movements in US bond yields given the growing influence of this data on how the US Federal Reserve thinks about policy rates.

Possible local catalysts, meanwhile, are the upcoming data on the latest overseas Filipino remittances report due on Oct. 16; the balance of payments (BOP) data due on Oct. 19; and the next local policy rate-setting meeting set on Nov. 16, according to RCBC chief economist Michael Ricafort.

During its November policy rate-setting meeting, the Bangko Sentral ng Pilipinas would likely match the next Fed rate decision on Nov. 1, which could be a hike of 25 basis points.

At the same time, a Fed rate pause cannot be completely ruled out, as well as a pause on local policy rates, especially if the peso exchange rate is relatively stable, Ricafort said.

Last week, the PSEi slightly gained by 6.39 points or 0.1 percent despite the Israel-Hamas war.

This was an improvement from the previous week’s 61.29 points decline or one percent drop, as the PSEi slightly gained for most weeks since September 2023.

However, net foreign selling at the local stock market for the week rose to $58.3 million from $45.5 million a week ago.

Overall, it was a relatively benign week in the local market last week.

Moving forward, Ricafort sees immediate major resistance at 6,430 levels and sees immediate major support at 6,150 to 6,200 levels.

The next support levels are at 6,040 levels, then at the psychological 6,000-mark versus further downside potential, he said.