Cautious trading seen as Fed meets on rate hike

Local stocks are seen to continue trading with caution this week as the US Federal Reserve is widely expected to approve an interest rate increase.

Last week, the main-share Philippine Stock Exchange index (PSEi) fell by 1.36 percent to close on Friday at 7,146.27 ahead of the US Federal Open Market Committee (FOMC) meeting on March 14-15.

“Chartwise, the week’s close at 7,146.27 continues to suggest the market remains range bound between the 7,000-7,400 levels in the near term,” said BDO Unibank chief strategist Jonathan Ravelas.

“A break below 7,000 could call for further losses toward the 6,800-6,850 levels in the near term,” he said.

Today (March 13), the rebalancing of the PSEi is also set to take effect. Puregold is set to join the main index, replacing Emperador.

Last Friday, leading conglomerate SM Investments Corp. slid by 9.24 percent. This was attributed to a big fund manager realigning its portfolio to reflect a reduction in SMIC’s PSEi index weight by 0.51 percentage from 9.82 percent. —DORIS DUMLAO-ABADILLA