Trade news, fresh data seen lifting equities

GLOBAL trade developments and upcoming economic data are expected to lift investor sentiment this week, with the benchmark Philippine Stock Exchange index (PSEi) seen testing 6,800 points as the next resistance level, analysts said.

"The local market had a good run last week, rising past its 6,400 resistance level," Philstocks Financial Inc. research manager Japhet Tantiangco said.

He added that with the 6,400-point resistance breached last week, investors will likely test the validity of the breach, and if the index were to hold firm at that level, 6,400 "will be converted into a support [level] while the next resistance would be at the 6,800 level."

The benchmark PSEi closed Friday at 6,411.86, a near four-month high and up 2.28 percent week-on-week, narrowing the market's year-to-date loss to 1.79 percent.

"We expect the index to continue trading within the 6,300 to 6,500 range, with a bias toward the upside," said Unicapital Group research head Wendy Estacio-Cruz.

She said market catalysts this week include the release on May 6 and 8, respectively, of the April inflation rate and the first-quarter gross domestic product (GDP) growth rate.

According to Tantiangco, "an inflation print biased to the lower end of the BSP's (Bangko Sentral ng Pilipinas) 1.3 percent to 2.1 percent projection is expected to give sentiment a boost."

"Investors are also expected to continue monitoring the situation on global trade," he said, noting the continued strengthening of the peso against the US dollar.

This, along with apparent progress in the Philippines' ongoing trade negotiations with the US "are also expected to drive optimism in the local bourse," Tantiangco added.

Meanwhile, DragonFi Securities Inc. equity research analyst Franco Fernandez sees some profit-taking emerging early in the week "as investors reposition ahead of key economic releases ... which could help shape the market's near-term bias."

Fernandez said investors will be closely monitoring the US Federal Reserve's interest rate decision on May 8 to see how the Fed will respond to recent weak US economic data releases.

US GDP in the first quarter shrank at an annual rate of 0.3 percent against the 2.4-percent growth logged in the fourth quarter of 2024, based on initial estimates released by US Bureau of Economic Analysis last April 30.

Likewise, US personal consumption expenditures data for March this year slowed to 2.3 percent from 2.7 percent in February, and from 2.6 percent in January 2025 and December 2024.

"If the rally in the PSEi continues, the next resistance is [seen at] around 6,600, with support at 6,400 and 6,200," Fernandez added.

Meanwhile, online stock brokerage firm 2TradeAsia.com said, "We underscore selective positioning in property and infrastructure-related names, especially those poised to benefit from a fiscal reset post-election."

"On the flip side, caution is still warranted on exporters and rate-sensitive REITs (real estate investment trust), given lingering global rate and trade policy volatility," it continued.

2TradeAsia advised investors to "think in positioning terms: selective accumulation, staggered entry, and patience."