The Philippine stock market is expected to retest the 6,400 level this week as lingering overseas concerns continue to dampen investor sentiment.
Japhet Tantiangco, research head at Philstocks Financial Inc., said that while the market is considered undervalued at current levels, sentiment remains bearish due to global trade uncertainties stemming from U.S. trade policies.
On a positive note, Tantiangco said the latest inflation data may raise hopes for more aggressive policy easing by the Bangko Sentral ng Pilipinas (BSP), which could boost the market.
Inflation further eased to 1.3 percent in May, its lowest in nearly six years, fueling expectations of another interest rate cut by the BSP.
Investors this week are also expected to analyze labor market data for clues on the strength of the local economy.
Last week, the 30-company Philippine Stock Exchange index (PSEi) rebounded after two consecutive weeks of losses, closing at 6,376.79.
However, the market failed to break the 6,400 resistance level as value turnover remained thin.
“Overall, market confidence is seen to remain low, which explains the tepid movements,” Tantiangco said.
Average daily value traded reached P6.42 billion, down from the previous week’s average of P12.2 billion.
Foreign investors, however, were net buyers for the week, with inflows reaching P543 million.
