Sideways trading on upward bias seen

MANILA, Philippines — Local stocks are expected to trade sideways this week, with a slight upward bias, on hopes the Bangko Sentral ng Pilipinas (BSP) will further ease monetary policy.

The benchmark Philippine Stock Exchange index (PSEi) was able to end in positive territory last Friday at 6,729.14 following a three-day decline.

Week-on-week, the PSEI was up by 1.74 percent.

Philstocks Financial research manager Japhet Tantiangco said the local market was able to bounce back last week and close at the 6,700 to 6,800 support range.

This week, he said that the market may continue to test the said range.

“The market could move with an upward bias amid hopes that the BSP will further ease monetary policy. This comes as inflation is seen to remain under control based on the latest figures,” Tantiangco said.

Further, Tantiangco said the local currency’s appreciation against the US dollar, should it continue, may give the market a boost.

“Investors are also expected to watch out for the upcoming November inflation numbers in the US as this would give clues on the Federal Reserve’s policy outlook,” he said.

Resistance is currently seen at 7,000, while immediate support is at 6,500.

“Forces in the short run are likely to maintain pressure on the PSEl, which made camp south of 7,000, until yearend,” online brokerage firm 2TradeAsia.com said.

“It is interesting to note, in this season of looking ahead and repositioning into next year, that local equities, fundamentally, are in a position of strength relative to counterparts in developed markets, common headwinds notwithstanding,” it said.