MANILA, Philippines — Narrow trading is expected this week as investors are likely to stay cautious while waiting for fresh leads and positive catalysts.
While the Philippine Stock Exchange index finished in negative territory last Friday at 5,761.95, it was able to gain by 1.4 percent week-on-week.
Unicapital Securities head of research Wendy Estacio-Cruz said the market was able to price in some developments on the US mid-term elections results, helping overshadow the country’s still-elevated inflation in October.
This week, Estacio-Cruz sees investors monitoring if lower oil prices and peso gains can be sustained, alongside upcoming corporate earnings.
“These could provide support to the market, although elevated inflation keeps the risk of further Bangko Sentral ng Pilipinas tightening in focus,” she said.
First Metro Investment Corp. head of research Cristina Ulang expects the market to be wary of Wall Street’s artificial intelligence selloff and Asian contagion risks, “cashing in early gains in narrow range trading within 5,700 to 5,800.”
First Metro Securities, for its part, said investors would continue to monitor geopolitical developments in the Middle East as oil price movements remain a key factor for global inflation and market sentiment.
Investors will also keep a close eye on the release of the country’s third quarter gross domestic product (GDP) data.
“With GDP out this morning, we would not add into the print and would use any strength to raise cash, as last week’s rally was narrow and led by a few banks,” 2TradeAsia.com said.
“Support sits at 5,700; a GDP miss likely tests 5,500 to 5,600, and a break there keeps us defensive through the Dec. 17 BSP meeting,” it said.