Muted trading seen this week

MANILA, Philippines — Muted trading in the local stock market is expected in this shortened trading week as investors may continue to digest the rate cut projections of both the Bangko Sentral ng Pilipinas (BSP) and the Federal Reserve.

Despite finishing in the green last Friday at 6,406.38 following a seven-day slump, the Philippine Stock Exchange index still dropped by 3.18 percent week-on-week.

Online brokerage firm 2TradeAsia.com said the hawkish comments from the Fed and the BSP spooked local equities last week.

“The Fed and the BSP played out their predicted moves this December round of policy meetings: both 25-bps sized cuts to cap the year. The catch is in the outlook for next year, both scaling back on aggressive rate cutting,” it said.

Given these developments, 2TradeAsia.com  said  quiet sessions should be expected in the final trading week of the year.

There will be no trading tomorrow and on Wednesday.

Philstocks Financial research manager Japhet Tantiangco, said the local market has been driven to more attractive levels from a fundamental standpoint.

He said that the current market level gives opportunity to bargain hunters.

“However, the trimmed rate cut projections of both the Federal Reserve and the BSP may weigh on the market,” Tantiangco said.

“The 2025 national budget concerns, if these remains unresolved, may also dampen sentiment,” he said.

Investors are likewise expected to monitor the movement of the local currency in the coming days.

“A further depreciation of the peso is expected to pose downside risks to the market while a recovery is expected to provide the opposite,” Tantiangco said.

Immediate support for the market is seen at 6,200 to 6,400, while resistance is at 6,500 to 6,700.