Market Outlook

The index was trading bullish closing at high 7400s region after a sell-off on opening of last week as investors begin to take profits at opening day whilst weighing lower inflation expectations.

Sentiment might glide to Wall Street’s ascent, on latest jobs addition data, while follow-through buying takes support from September’s inflation trend.

The PSEi inched higher by 0.53% w/w to register another 52-week high at 7,467.92 (+39.62pts).

Activity might be range-bound for now, given yesterday’s sell-off.

Another upbeat tone is in store for local equities, as overseas fund managers take interest in China’s stimulus measures, alongside the Fed’s sequel rate cuts.

Investors might monitor continuity of yesterday’s breather, as gauges firms up on a solid base to support stronger rallies.

We’re pushing peaks as the index closed at 7432.21 (+0.24%) yesterday.

Hints for possible tempered inflation in September plus S&P Global Ratings’ rate cut outlook on the Philippines may support advances.

With just a few points shy from the 7,500 zone, participants are likely to take on feelers whether some might seize on this strength to cash-out, while monitoring the depth of positioning on intra-day dips.

The PSEi surged 3.27% w/w to close at 7,252.32 (+229.47pts).

The local central bank’s 250bps cut in banks’ reserve requirement was more than our estimated 100bps, underscoring their goal of pump-priming the economy.

The PSEI closed at the 7,200 level for the first time this week, and currently maintaining a steady upward climb.

The market might take its cue from Wall Street’s incline (DJIA +1.26%, Nasdaq Comp. +2.51%) as expectations build for a new cycle of monetary policy easing with the Fed’s rate cut move.

Investors will highlight the Fed’s 50bps rate cut, as well as BSP chief Remolona, Jr.’s stance for ‘significant reduction’ in banks’ reserve requirements.

Participants will monitor a firmer momentum trend as the PSEi fortifies the 7,000 level, with the return of some fund managers from their Mid-Autumn Festival break.