Investors Await Federal Reserve Action for Market Momentum
Investors are turning their attention to the Federal Reserve this week, hoping for clarity on the upcoming monetary policy statement. Despite rising inflation in the Philippines, the local stock market rebounded, with analysts anticipating a rate cut by the US Federal Reserve. This potential move could bring optimism for a similar cut in the Philippines.
According to trading platform 2TradeAsia, any deviation from the expected rate cut by the US Fed could hinder market rallies for the rest of the month. The Bangko Sentral ng Pilipinas has already reduced its benchmark rate by a total of 50 basis points to 6 percent and hinted at another possible rate cut in its upcoming meeting this month.
Last week, the Philippine Stock Exchange Index (PSEi) saw gains, closing at 6,729 on Friday, marking a 1.74 percent increase week-on-week. Despite an increase in domestic inflation to 2.5 percent in November from 2.3 percent in October, the PSEi remained resilient, staying within the government’s target range.
The impact of typhoons was absorbed by commodities, contributing to the inflation uptick. However, 2TradeAsia noted that the local market might not be as affected by global risks and uncertainties as other markets due to the Philippines’ heavy reliance on domestic consumption.
Looking ahead, 2TradeAsia identified the PSEi’s immediate support level at 6,500 and resistance at 7,000 for the week ahead. Stay tuned for more updates as the market reacts to the latest developments.
