Sans strong catalysts, lackluster week likely

SIGNIFICANT share price movements are unlikely in this week’s shortened trading span, analysts said, given a lack of catalysts that could boost sentiment and as markets kiss goodbye to the first quarter.

Philippine financial markets will only be open from Monday to Wednesday, with March 28 (Maundy Thursday) and March 29 (Good Friday) being declared regular holidays in observance of Holy Week.

The 30-company Philippine Stock Exchange index (PSEi) closed 0.87 percent higher week-on-week at 6,881.97 last Friday following the US Federal Reserve’s status quo move on benchmark rates that bolstered global buying.

Despite slight gains last week amid renewed interest rate-cut hopes, Philstocks Financial Inc. senior research analyst Japhet Tantiangco said the bourse continued to struggle to stay above its 10-day exponential moving average.

While there is still room for bargain hunting, the PSEi “is not seen to have a strong positive catalyst.”

“Hence, with [this] week’s shortened trading week, cautious sentiment is expected to linger, which in turn could lead to a sideways movement for the bourse,” he added.

A sustained Wall Street performance may provide positive spillovers while a continued Philippine peso depreciation against the US dollar could weigh on sentiment, Tantiangco said.

Online brokerage 2TradeAsia.com, meanwhile, said quarter-end window dressing was expected this week along with “potentially lower volumes ahead of Lent.”

The PSEi could still see positive momentum on the back of strong growth from banking, property, gaming, and power. Broader valuations, however, remain low compared to regional peers.

“[M]ore data points have tilted markets towards a more positive outlook in both macro and corporate earnings, but it is also crucial to ground expectations and limit exposure to quality — pending actual rate cycle changes,” 2TradeAsia said.

In its upcoming meeting on April 8, the Bangko Sentral ng Pilipinas is also likely to mirror the US Federal Reserve’s move on key rates as inflation “remains sticky,” the online brokerage added.

The US central bank last week kept interest rates on hold given persistent inflation and indicated that three cuts were likely later in the year. Analysts expect the first to be announced in June,

Chartwise, the local stock market’s support is still seen in the 6,700-6,800 range, while its resistance is expected to be at 7,000.