THE threat of US tariffs will likely continue affecting the stock market, analysts said, but bargain hunting and economic data due this week may provide some support.
THE threat of US tariffs will likely continue affecting the stock market, analysts said, but bargain hunting and economic data due this week may provide some support.The benchmark Philippine Stock Exchange index fell by 2.
4 percent week on week on Friday, closing at 6,613.85, and was down a steeper 7.4 percent for the month as US President-elect Donald Trump doubled down on campaign promises to raise tariffs on all imports.The PSEi, which opened higher last week, reversed to a four-day decline after Trump declared that he would immediately raise tariffs on goods from Canada, Mexico and China.Rizal Commercial Banking Corp. chief economist Michael Ricafort said that Trump's remarks 'could lead to a potential retaliatory tariffs/trade war, higher US inflation, and could slow global trade and overall world economic/GDP growth, similar to the first Trump administration.'Philstocks Financial Inc. research manager Japhet Tantiangco noted that 'the local market is once again on a decline after failing to break above its 200-day exponential moving average. In the process, the market has broken below the 6,700-6,800 support range.''Its MACD line has crossed below the signal line implying bearish momentum in the short term,' he added.The PSEi's movements could be limited this week, Tantiangco said, but added that 'with the market at attractive levels, we may see some episodes of bargain hunting.''However, we also expect lingering concerns to continue weighing on sentiment,' he continued.'This includes first, US President-elect Donald Trump's planned protectionist policies and its impact on global economic prospects, as well as the uncertainties on the Federal Reserve's policy outlook,' he continued.Investors will also be waiting for the release of November inflation data on Thursday, which could provide clues as to where the Bangko Sentral ng Pilipinas' policy rate is headed.The BSP will hold its last policy meeting for the year on Dec. 16 while the US central bank will also do so on Dec. 17 to 18.Tantiangco said that investors could also be watching for today's release of S&P Global's Philippines manufacturing purchasing managers' index for November and October unemployment data due Friday.Online brokerage firm 2TradeAsia.com, meanwhile, said 'the US' pivot towards protectionist policies added another layer to the unpredictability of interest rates in 2025.''These policies, as we have harped in the past, are naturally inflationary, and likely to affect the central banking year,' it added.Local and global geopolitical tensions have intensified, 2TradeAsia noted, affecting the outlook for key players.'European Union and China responses and stimuli in 2025 are being watched,' the online brokerage said.'Not only have these impacted commodities and pricing in the short-run, but also shifted fund deployment in light of uneven risk premiums,' it continued.'Likewise, expect domestic political conflicts to maintain negative pressure on the macro news cycle, especially if they protract heading into the campaign season in .'A mounting rift between President Ferdinand Marcos Jr. and Vice President Sara Duterte has been cited by some analysts as having affected the peso and stock market as this could lead to policy instability.Uncertainties are likely to keep share prices down in the short run, 2TradeAsia said, and investors should move to preserve yields by shifting towards higher-quality assets.Analysts said that immediate support this week would be at 6,400-6,500 while resistance was seen at 6,700-7,000.
Threat To Keep Weighing On Market
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