Weak peso, inflation concerns to drag PHL shares - BusinessWorld Online
PHILIPPINE SHARES may trade sideways this week as a weaker peso and rising oil prices drag sentiment, with the market looking ahead to key US data that could affect the US Federal Reserve’s policy stance. On Friday, the Philippine Stock Exchange index (PSEi) rose by 0.35% or 21.18 points to close at...
Philippine Shares Expected to Trade Sideways Amid Weak Peso and Inflation Concerns
The Philippine stock market is likely to trade sideways this week as a weaker peso and rising oil prices weigh on investor sentiment. The market is also looking ahead to key US data that could influence the US Federal Reserve's policy stance.
Market Performance Last Week
On Friday, the Philippine Stock Exchange index (PSEi) rose by 0.35% or 21.18 points to close at 6,090.60, while the broader all shares index increased by 0.23% or 7.63 points to end at 3,377.44. COL Financial Group Research Analyst Denise Joaquin noted that the local market closed out the previous week on a positive note, driven by easing bets for a September Fed rate hike, which lifted sentiment across the region. Investors also digested in‑line inflation data, with August inflation easing slightly to 6.1% from 6.2% in July, broadly matching economists’ expectations.
Investor Sentiment and Market Outlook
Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said that overall investor confidence remains low, as reflected in the tepid value turnover. For this week, the local bourse could stay under pressure because of weak investor sentiment, a depreciating peso, elevated yields, and rising oil prices. Tantiangco described the economic outlook as challenged and said the chart remains bearish, indicating a near‑term downward bias for the market.
Impact of Global Events on the Market
Renewed tensions between the United States and Iran have pushed Brent crude prices back above $90 per barrel, a move expected to lift domestic fuel prices and add to inflation pressures. Tantiangco warned that rising global oil prices, the weakening peso, and agricultural supply threats linked to El Niño create upside risks for commodity prices, which could reverse the recent easing of inflation. Such a reversal would pose downside risks to economic growth in the second half of the year.
Market Trends and Expectations
The current trading range is seen between 6,000 and 6,150, and the index is sitting below its 10‑day, 50‑day, and 200‑day exponential moving averages, a sign of bearishness. Joaquin added that the market could remain sideways for the upcoming week as investors stay cautious and monitor movements in the peso and global Treasury yields. Local economic data on labor and foreign direct investment are slated for release this week, while a key focus will be US inflation figures that could shape the Fed’s policy decision later this month.
US Economic Data and FED Policy
Reuters reported that short‑term interest‑rate futures implied about a 65% chance of a rate hike at the Fed’s September meeting after the latest US jobs report, up from roughly 55% beforehand. By New York afternoon trade, that probability had slipped to 57%. The market is watching these developments closely, as they could have a significant impact on the Philippines’ economy and stock‑market performance.
Source: bworldonline.com · 2026-09-06