Cautious trading seen as market awaits new leads

PHILIPPINE STOCKS may get a lift from bargain hunting this week, although cautious sentiment may prevail as players look for fresh catalysts.

On Friday, the Philippine Stock Exchange index (PSEi) retreated by 0.84% or 51.86 points to close at 6,061.33, while the broader all shares index declined by 0.5% or 18.45 points to end at 3,629.28.

Week on week, the PSEi declined by 1.52% or 93.66 points from its 6,154.99 finish on Feb. 7.

“Sessions moved within a tight range [last] week following the Bangko Sentral ng Pilipinas’ (BSP) surprise move to keep its key rate steady,” online brokerage 2TradeAsia.com said in a note.

“The local market failed to sustain its momentum last week as new tariff threats and failed hopes of a BSP rate cut weighed on sentiment. Last week’s trading also shows that the market is still having a difficult time getting past its 10-day exponential moving average,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

The Monetary Board on Thursday unexpectedly held benchmark interest rates steady as global uncertainties threaten the outlook for inflation and growth.

This marks the BSP’s first pause following three consecutive 25-basis-point (bp) cuts since it began its easing cycle in August 2024. The decision took the market by surprise as 19 out of 20 analysts polled by BusinessWorld had anticipated a fourth straight 25-bp cut at Thursday’s meeting, and just one analyst expected the BSP to keep rates steady.

This week, Mr. Tantiangco said the market may rebound on bargain hunting.

“The local market remains undervalued. Hence, we may see episodes of bargain hunting this week. However, we don’t see a strong catalyst yet that could propel the market to stage a significant rally. Investors are expected to maintain a cautious stance while waiting for fresh leads,” he said.

“US President Donald J. Trump’s latest tariff moves and the BSP’s decision to keep policy rates unchanged may also continue to weigh on sentiment,” Mr. Tantiangco added. He placed the PSEi’s support at 6,000 and resistance at 6,400.

Mr. Trump on Friday kept alive his drumbeat of tariff threats, saying levies on automobiles would be coming as soon as April 2, the day after members of his cabinet are due to deliver reports to him outlining options for a range of import duties as he seeks to reshape global trade, Reuters reported.

It was the latest in a litany of trade actions Mr. Trump has unveiled since taking office for the second time on January 20.

For its part, 2TradeAsia.com placed the PSEi’s immediate support at 6,000 and resistance at 6,300-6,400.

“Tensions abroad and uncertainties in trade and monetary policies cast a very long shadow over markets — these may persist in the medium-term, and strategies have to take into account weak capital flows and lower appetite for risk,” the online brokerage said. — Revin Mikhael D. Ochave with Reuters