REUTERS

PHILIPPINE SHARES may rebound this week on increased flows amid fresh catalysts, including inflation and factory activity data, and with the market awaiting developments regarding the Trump administration’s trade policy.

On Friday, the Philippine Stock Exchange index (PSEi) slumped by 2.06% or 126.12 points to close at 5,997.97, while the broader all shares index declined by 1.83% or 67.07 points to end at 3,588.12.

Week on week, the PSEi went down by 1.64% or 100.07 points from its 6,098.04 finish on Feb. 21.

“The benchmark index failed to hold above the 6,000 psychological support level, impacted by the latest MSCI (Morgan Stanley Capital International) rebalancing,” online brokerage 2TradeAsia.com said in a market note.

For this week, 2TradeAsia.com said the release of February Philippine headline inflation data on March 5 (Wednesday) will take center stage. The consumer price index may have settled within 2.3%–3% last month, the Bangko Sentral ng Pilipinas said on Friday.

Anticipation for the report may cause the PSEi to rise on Monday, Rastine Mackie D. Mercado, research director at China Bank Securities Corp., said in an e-mail.

“We think that the PSEi could bounce back at Monday’s open given the MSCI-flows related forced downward closure on Friday. If this expectation materializes, we see the PSEi continuing to traverse the 6,000-6,150 range for most part of the week,” he said. “Upcoming data releases, such as the domestic February manufacturing PMI (purchasing managers’ index) and inflation could also spur reactive moves.”

“If the PSEi is able to find its footing atop 6,000 in the coming week, then prospects of a retest of the 6,150 level remain in play in the short term.”

Meanwhile, tariff announcements from US President Donald J. Trump could continue to weigh down market sentiment, said Toby Allan C. Arce, head of sales at Globalinks Securities and Stocks, Inc.

“The international community is increasingly wary of Trump’s hardline stance, which targets countries accused of unfair trade practices, drug trafficking, and immigration challenges… Investors, who had become less reactive to trade headlines, are now recalibrating their outlook as these measures threaten to exacerbate global economic uncertainties,” Mr. Arce said in a Viber message.

Mr. Trump said on Thursday that 25% duties on imports from Canada and Mexico will come into effect on March 4 — not April 2 as he had suggested a day earlier — and said goods from China will be subject to an additional 10% duty, Reuters reported. Last week, he also floated 25% tariffs on shipments from the European Union.

2TradeAsia.com placed the PSEi’s immediate support at 5,800 and resistance at 6,000.

“External risks continue to cap rallies, but mean reversion and factor rotation could create tactical opportunities once confidence stabilizes,” it added. — Sheldeen Joy Talavera with Reuters

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