Shares to move sideways as market seeks leads

PHILIPPINE STOCKS may move sideways this week as investors stay on the sidelines in anticipation of the release of companies’ financial results and economic data.

On Friday, the bellwether Philippine Stock Exchange index (PSEi) inched up by 0.13% or 8.87 points to end at 6,390.91, while the broader all shares index went down by 0.09% or 3.40 points to close at 3,584.43.

Week on week, the PSEi increased by 61.94 points from its Jan. 30 finish of 6,328.97.

“The PSEi staged a volatile rebound as record-high January manufacturing output and within-target inflation (2%) countered a more cautious growth outlook from Fitch’s BMI, lifting the index 61 points up at 6,390,” 2TradeAsia.com said in a market note.

It said the inflation uptick could mean “tighter breathing room” for monetary policy.

“The local market bounced back last week on satisfactory inflation figures and hopes of economic growth recovery. Trading has weakened however, implying that many investors are turning more cautious,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

For this week, players may continue to stay on the sidelines as they wait for new trading drivers, he said.

“Focus now is expected to be directed towards fourth-quarter and full-year 2025 corporate results,” Mr. Tantiangco said.

“Investors may also take cues from our upcoming foreign direct investments data. Investors are also expected to look at the local currency’s movement. A further appreciation of the peso against the US dollar may give the local market a boost.”

On Friday, the peso closed at a new seven-week high of P58.585 per dollar, rising by 10.5 centavos from its P58.69 finish on Thursday, data from the Bankers Association of the Philippines showed.

Week on week, the peso jumped by 23 centavos from its P58.86 close on Jan. 30.

“The local market remains attractive from a marketability standpoint. As of Friday’s closing, the market’s price-to-earnings ratio stands at 10.7 times, below its historical average of 14.4 times and the regional average of 18.9 times,” Mr. Tantiangco said.

“Chart-wise, the local market is still having a difficult time getting past its 6,400-resistance line. On a positive note, it is still trading above its 10-day, 50-day, and 200-day exponential moving averages (EMA),” he added. “Its 50-day and 200-day EMA have already formed a golden cross, which signals a possible uptrend in the medium to long run.”

He said the PSEi will continue to test its 6,400 resistance this week, with its major support at 6,150.

2TradeAsia.com placed the PSEi’s immediate support at 6,300, secondary support at 6,100, and resistance at 6,500.

“Themes of caution and rotation define the outlook… The recent surge in safe havens is not to be ignored, but it is just as important to not confuse a consolidation phase for a bear market.” — Alexandria Grace C. Magno