PSEi may decline on weaker peso, Trump victory

By Revin Mikhael D. Ochave, Reporter

PHILIPPINE STOCKS are expected to decline this week amid a weak peso and negative market sentiment about incoming US President Donald Trump’s protectionist stance.

“Concerns over trade and global growth continued to weaken emerging markets in general,” online brokerage 2TradeAsia.com said in a market note last week, citing another weekly sell-off.

On Friday, the Philippine Stock Exchange index (PSEi) rose 1.82% or 119.56 points to 6,676.65. The broader all-share index also gained 2.5% or 92.18 points to 3,772.80. Week on week, the PSEi fell 4.3% or 300.53 points from 6,977.18 on Nov. 8, marking a four-week decline.

The Stock market could fall due to economic headwinds, Japhet Louis O. Tantiangco, senior research analyst at Philstocks Financial, Inc., said in a Viber message.

“If our current headwinds are still present this week, then the risk of another decline is still high,” he said. “Headwinds include the weakness of the local currency and the rise of long-term local and US yields.”

“They also include concerns over the prospects of protectionist policies in the US and their impact on the global economy,” he added.

On Friday, the peso closed at P58.732 a dollar, 4.50 centavos stronger than its P58.777 finish on Thursday. Week on week, it dropped 47.20 centavos from P58.26 on Nov. 8.

The yield on benchmark 10-year US notes also 1.9 basis points to 4.439% on Friday after reaching 4.505%, its highest level since May 31.

Chinese President Xi Jinping on Friday said unilateralism and protectionism should be rejected in favor of economic globalization amid the return to the White House of Mr. Trump, who pledged to impose tariffs on Chinese imports in excess of 60%.

“On a positive note, our sound third quarter and first nine months of corporate results may give the market support,” Mr. Tantiangco said.

“The market’s four-week fall has brought it to even more attractive levels, opening the possibility of bargain-hunting at next week’s trading,” he added.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., placed market support at 6,500 points and major resistance at 7,080 to 7,205.

“The PSEi corrected higher on some rotational trading from markets that benefited since Donald Trump won the US presidential election on Nov. 5,” he said in an e-mail. “US stock markets mostly corrected slightly lower from near record high.”

2TradeAsia.com placed said the market’s support at 6,400 to 6,550 and resistance at 7,000.

“Look towards oversold shares for rebound plays in the short and medium terms, while the market mulls over where the equilibrium is given evolving risks for 2025,” it added.

Mr. Tantiangco pegged the market’s support at 6,400 and resistance at 6,700 to 6,800.