Market to move sideways ahead of Fed meeting

The local stock market is expected to trade sideways this week as investors are likely to tread with caution ahead of the scheduled March meeting of the US Federal Reserve.

Last week, the bourse finished on a sour note, snapping not only a three-day winning streak but also a seven-week gaining streak.

The benchmark 30-company Philippine Stock Market index (PSEi) closed at 6,822.32, down 1.73 percent week-onweek following a major selloff.

Japhet Tantiangco of PhilStocks Financial said last week’s drop opens doors for bargain hunting opportunities this week.

“However, a strong rally could be difficult amid tempered hopes of a soon rate cut by the Federal Reserve following the above expected US producer price index inflation. Hence, the market may only move sideways,” he said.

For this week, Tantiangco said investors are also expected to watch out for the Federal Open Market Committee meeting for more clues on the Fed’s policy outlook.

He said investors are also expected to watch out for the remainder of the full year 2023 corporate results.

2TradeAsia.com said strong events are needed to provide an impetus for bulls to fully breach its 7,000 resistance, after selling presssure led to the PSEi falling back to the 6,800 level.

“Positive corporate results so far seem to only move the trading needle ever so slightly and swings seem to still be tied to macro movements, particularly to headlines that affect cost of capital,” it said.

The market’s support is seen at 6,700 to 6,800, while resistance is at 7,000.