Stocks to move sideways as sentiment stays weak

PHILIPPINE STOCKS may continue to move sideways this week amid weak sentiment as investors await fresh leads, particularly from the trade talks between the US and China and the US Federal Reserve’s policy meeting.

On Friday, the benchmark Philippine Stock Exchange index (PSEi) slid by 1.08% or 65.94 points to close at 5,988.02, while the broader all shares index fell by 0.81% or 29.47 points to 3,608.11.

This was the index’s worst close in nearly a month or since it finished at 5,953.46 on Sept. 30.

Week on week, the PSEi also slumped by 101.51 points from its close of 6,089.53 on Oct. 17.

“The Philippine market ended below the 6,000 mark as sellers took control of the session. The sustained depreciation of the US dollar against the Philippine peso continues to weigh on market sentiment. Moreover, market participants are likely pricing in the anticipated lower GDP (gross domestic product) forecast projected by various institutions,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message on Friday.

“Sellers dominated local equities last week on China-US trade plus geopolitical uncertainties, as well as lack of other local catalysts,” online brokerage 2TradeAsia.com said in a market note.

For this week, Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said the market will look for new drivers.

“We may see some episodes of upticks driven by bargain hunting. However, cautious sentiment is expected to remain as investors continue to wait for catalysts while dealing with present concerns,” Mr. Tantiangco said in a Viber message.

“The local market is ultimately still bearishly biased amid lingering downside risks and lack of fresh leads.”

He added that investors are awaiting the scheduled trade talks between US President Donald J. Trump and Chinese President Xi Jinping. “Positive results from the meeting, primarily a trade deal, is expected to help in lifting market sentiment.”

“Chart-wise, the local market is still on a downtrend, forming another lower high after hitting its 50-day exponential moving average last Oct. 20… Moving forward, the market may test the validity of its breach of these lines. If the market is unable to get back above 6,000, this will be its new resistance, while the next support is seen at 5,800,” Mr. Tantiangco said.

“The Trump-Xi summit in Korea… looms as a wildcard for supply chain in tech and autos, potentially reigniting protectionist headwinds that cascade into broader sentiment erosion,” 2TradeAsia.com added.

It said the market will monitor the Fed’s Oct. 28-29 meeting, where it is expected to continue its easing cycle after delivering its first rate cut for this year last month. “This paves the way for a December follow-through that could sustain the easing cycle into early 2026 if inflation prints continue to cooperate.”

It placed the PSEi’s immediate support at 6,000 and secondary support at 5,800, while resistance is pegged at 6,200. — Alexandria Grace C. Magno