PSEi may sustain rally this week
PSEi may sustain rally this week
MANILA, Philippines — Positive cues provided by the Bangko Sentral ng Pilipinas (BSP) in its latest policy meeting could fuel a sustained market rally this week.
The benchmark Philippine Stock Exchange index (PSEi) is currently on a five-day winning streak after closing last Friday at 6.411.91, up by 4.12 percent week-on-week.
2TradeAsia.com in its report said the PSEi recorded its biggest weekly gain for the year last week, making a quick bounce to form following its largest weekly loss for the year the prior week.
It said bargain hunters rode a positive wave of sentiment from the BSP’s dovish messages.
“We saw a turnaround in the local market last week as it rose by 4.12 percent on the back of bargain hunting. Adding to the positive signs, the market was able to get past its 10-day exponential moving average as well as the 6,400 level which currently serves as a resistance,” Philstocks Financial research manager Japhet Tantiangco said separately.
Given these developments, Tantiangco said there is a possibility of the market extending its climb this week.
“This is due to the dovish signals that the BSP has given in its latest policy meeting,” he said.
According to Tantiangco, the BSP has downgraded its risk-adjusted inflation forecast for 2024 and 2025, while BSP Governor Eli Remolona Jr. has signaled the possibility of a rate cut in their August meeting.
“Prospects of monetary easing are expected to boost confidence toward the market given its positive impact on the general economy as well as on the corporate sector,” he said.
For this week, Tantiangco said investors are also expected to watch out for the Philippines’ June inflation data as this would also provide clues on our country’s monetary policy outlook.
He said the local market may test the validity of its breach of the 6,400 resistance level this week.
Should the market hold its ground above the said line, he said 6,400 would be seen again as the market’s support while next resistance is pegged at 6,700.