Stocks to trade sideways as risks persist – analysts

Market Volatility Why Stocks May Trade Sideways Amid Risks

As investors navigate the unpredictable world of finance, it is essential t
to stay informed about market trends and risks. In this article, we will ex
explore why local stocks may trade sideways in the face of inflation concer
concerns, policy tightening, and global geopolitical tensions.

The Philippine Stock Exchange Index A Mixed Performance

The benchmark Philippine Stock Exchange index (PSEi) closed at 5,961.40 on 
Friday, up 0.7 percent from Thursday but down 0.3 percent week-on-week. Whi
While the market showed some resilience, analysts believe that investors re
remain cautious due to ongoing risks.

What's Behind the Caution?

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., highli
highlights several factors contributing to the market's volatility

Inflation concerns The peso's persistent weakness and elevated oil p
prices amid the ongoing Middle East war have kept inflation risks elevated.
elevated.
Policy tightening Expectations of possible further rate hik
hikes by the Bangko Sentral ng Pilipinas (BSP) have weighed on growth-sensi
growth-sensitive sectors.
Global uncertainty US equities may be near record highs, but global 
geopolitical tensions continue to dampen investor sentiment.

Sector Performance A Mixed Bag

Online brokerage 2TradeAsia.com notes that sector performance was mixed las
last week, with industrials and mining and oil being the biggest decliners.
decliners. Foreign investors turned net sellers, while turnover weakened sh
sharply from previous weeks.

Philstocks' Perspective Sideways Trading Ahead?

Japhet Tantiangco, research manager at Philstocks Financial Inc., expects t
the market to trade sideways this week as investors take a wait-and-see sta
stance amid conflicting domestic and global signals. He highlights that the
the index continues to face strong resistance at 6,000 points, with support
support seen between 5,900 and 5,816.82.

A Word of Caution Focus on Defensive Names

Given the current macro and geopolitical backdrop, analysts advise investor
investors to remain cautious and focus on defensive, high-quality names ami
amid continued volatility. This sacrosanct approach can help investors weat
weather market fluctuations and minimize losses.

Takeaways

• Local stocks may trade sideways due to ongoing risks.
• Inflation concerns, policy tightening, and global uncertainty are key fac
factors contributing to market volatility.
• Defensive, high-quality names are a safer bet in the current market envir
environment.

Actionable Insights

• Rebalance your portfolio to prioritize defensive names.
• Monitor sector performance and adjust your investment strategy accordingl
accordingly.
• Stay informed about macroeconomic trends and geopolitical developments to
to make more informed investment decisions.

By understanding the market's volatility and taking a proactive approach, y
you can better navigate the complexities of stock trading. Remember to stay
stay cautious, focus on defensive names, and prioritize long-term growth ov
over short-term gains.

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Edward Lance Arellano Lorilla

CEO / Co-Founder

Enjoy the little things in life. For one day, you may look back and realize they were the big things. Many of life's failures are people who did not realize how close they were to success when they gave up.