Philippine stocks are expected to sustain their uptrend this trading week, possibly retesting the 7,000 level, as investors expect the US Federal Reserve to reduce its key rates in September.
Financial markets will be closed on Friday in celebration of Ninoy Aquino Day.
Online brokerage firm 2TradeAsia.com said a September rate cut is now bring priced after US inflation rate in August eased to 2.9 percent.
“There is still one month of inflation reporting on September before the US Fed’s September meeting that could technical sway the needle, but the four-month inflation downward trend has only solidified calls for more stimulatory action from Fed,” said 2TradeAsia.com.
It noted a clear upward momentum as monetary easing both here and abroad will likely benefit risk assets.
“The dying out of the ‘high-for-longer’ view on global interest rates may be the impetus the PSEi needs to approach the 7,000 level in the medium term. But it is important to keep pace and not get lost in the exuberance” it said.
The market’s support is seen at 6,600 for this week, and resistance at 7,000.
The Philippine Stock Exchange index rallied by 199 points to close at 6,847 last week after the 25-basis-point rate cut by the Bangko Sentral ng Pilipinas boosted investor sentiment.
Investors also cheered the positive second-quarter earnings results of listed companies.
Average daily value traded improved to P5.65 billion, while foreign investors turned net buyers at an average of P289 million.
