Investor expectations with regard to US Federal Reserve and Bangko Sentral ng Pilipinas (BSP) policy meetings will determine the stock market’s direction this week, analysts said.
“The topic points will be on inflation outlook and job creation, given the symphony of aggressive fiscal spending in the global arena. In case Fed officials raise benchmark rates by 25 basis points (bps), focus will revert to the greenback, given their administration’s support for a stronger currency,” online brokerage firm 2TradeAsia.com said in a market note.
The US Federal Reserve Open Market Committee is expected to announce its first interest rate hike for the year this Wednesday, US time, following a two-day meeting. Observers will also be looking for indications as to how the US central bank would be proceeding with additional rate increases moving forward.
The BSP’s policymaking Monetary Board will also be meeting this Thursday, with analysts mixed on the prospect of rate hikes.
Regina Capital Development Corp. Managing Director Luis Limlingan expects monetary authorities to keep key interest rates unchanged.
Share prices, he added, could also take direction from fresh earnings reports.
Eagle Equities, Inc. research head Chris Mangun, meanwhile, said the local market could see continued sell-offs “but I think we will see a reversal sometime in the second quarter.”
“The market lost more than 100 points … [last]week as the market broke below our support levels. The chart showed a volume spike … which can be viewed as a selling climax. If we lose another 100 points this week then we are officially in a correction as we will be down 10 percent from the high,” Mangun said.
The bellwether Philippine Stock Exchange index (PSEi) rose 0.59 percent or 48.14 points to close at 8,238.15 on Friday. The broader All Shares added 0.32 percent or 16.06 points to end at 4,982.50.