MANILA, Philippines — The local stock market may move sideways this week as investors tread cautiously while waiting for fresh leads, with current market levels presenting opportunities for bargain hunting.
The Philippine Stock Exchange index finished in the red last Friday at 5,593.49, down by 2.92 percent week-on-week.
AB Capital Securities said the continued peso weakness and MSCI deletion-related selling weighed on sentiment last week.
This week, it said the 5,580 critical support would be watched.
“A break would expose pandemic-era lows as MSCI-related positioning intensifies ahead of the Nov. 27 rebalance,” AB Capital said.
Investors are expected to closely monitor developments at the ASEAN Summit, where regional economic and geopolitical issues will be discussed.
“For this week, trading activity may remain relatively thin amid the ASEAN-related holidays and shortened trading sessions. Investors are also expected to monitor developments in global oil prices, peso movements and remaining corporate earnings releases,” Unicapital Securities head of research Wendy Estacio-Cruz said.
“While lower oil prices could provide some relief on the inflation front, elevated inflation and concerns over weaker economic growth may continue to keep investors cautious,” she said.
Online brokerage firm 2tradeAsia.com, however, said volatility in crude pricing is seen, given US-Iran diplomatic stalemate plus fourth quarter surplus repricing from the International Energy Agency.
With the country’s October inflation accelerating to 7.8 percent, the online brokerage said it now treats stagflation as the base case rather than a risk.
It said labor data is the one to watch next, as September unemployment already rose to 5.4 percent and a higher October print would further hit consumption activity in the fourth quarter.
“Overall, these conditions leave little room on policy; with markets fully pricing a Fed hike on Dec. 9 with three more by mid-2027, the most conservative bet is to expect the BSP to deliver 25 bps on Dec. 17 to defend the peso, but hopefully with a clearer signal that 2027 will tilt toward a gentle pivot,” 2tradeAsia.com said.
Meanwhile, 2tradeAsia.com expects MSCI-driven selling to build heading into Nov. 27. MSCI will drop Meralco from the Philippines Standard Index and move PLDT down to Small Caps at the end of the month.
“And since Nov. 30 is a holiday, we expect most of the passive selling to land on the 27th. Interestingly, both names have already been sold off ahead of the deletion, so there may be entry windows as we see further weakness heading into that date,” it said.
With the index rebalancing taking effect on Nov 27, COL Financial, for its part, said the market could see increased trading activity and potential buying or selling pressure.