TRADERS will be awaiting the results of today's central bank policy meeting, analysts said, but the Philippine Stock Exchange index is not expected to see much of a lift given a shortened trading week and bearish sentiment.
Philippine financial markets will only be open on Monday, Thursday, and Friday, with the Araw ng Kagitingan (Day of Valor) regular holiday on April 9 and the 10th also having been declared a holiday in celebration of Eid al-Fitr or the Feast of Ramadan.
The 30-company Philippine Stock Exchange index (PSEi) recorded its worst weekly performance since October 2023 at the end of last Friday, closing 2.29 percent lower week-on-week at 6,745.46.
Philstocks Financial Inc. senior research analyst Japhet Tantiangco said that amid mounting risks to inflation and tempered rate-cut hopes here and abroad, sentiment was "turning bearish."
Domestic inflation rose for a second straight month in March at 3.7 percent, which soured sentiment and cast doubt on an earlier-than-expected monetary easing.
Bargain hunting, said Tantiangco, is likely following the PSEi's drop, but a strong rally may not yet be seen with "bearish factors at play and the lack of a positive catalyst," with a "further decline ... still possible."
"While policy rates will most likely be held at current levels, investors are expected to watch out for the BSP's (Bangko Sentral ng Pilipinas) cues on their policy outlook," he added.
"Cues of prolonged monetary tightening are expected to dampen sentiment, while cues of rate cuts are expected to do the opposite."
Online brokerage 2TradeAsia.com warned of a "sharp technical move in either direction unless a fundamental force drives a quick return to form."
Consequently, it encouraged investors to look for potential bargain picks while "the PSEi finds more comfortable footing around this zone, in light of what is shaping up to be a very nuanced second quarter."
Rizal Commercial Banking Corp. chief economist Michael Ricafort, meanwhile, said traders were also expected to closely monitor the release of employment and foreign trade data this week.
In the United States, upcoming economic data releases include the inflation report, due on Wednesday, and Thursday's release of the minutes from the Federal Reserve's previous meeting, he noted.
Chart-wise, the stock market could retest the 6,800 level, analysts said, while resistance is still likely at 7,000.
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