Investors are facing a busy week with upcoming interest rate announcements by the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP).
The benchmark Philippine Stock Exchange index (PSEi) ended the previous week with a 1.8 percent drop to 6,469.72.
Jonathan Ravelas, managing director at eManagement for Business and Marketing Services, said the recent decline puts the PSEi at risk of falling lower to 6,300.
He said the next support level was at 6,000, which could lure bargain hunters, making it a likely area for a bounce.
“The reason why the market is still falling is because people are still waiting on what the Fed will do,” he told the Inquirer.
He added that investors should not expect any fast recovery in stock market prices given the uncertainties looming over the global economy.
“You have to realize we came from a once-in-a-lifetime pandemic and the reopening of the economy doesn’t cure it immediately. It takes time to heal,” he said.
“What’s so difficult about the environment now is it’s challenged by higher interest rates and supply chain disruptions. It’s the same old thing as last year but now we are seeing defaults,” he said, referring to recent US bank failures.
The upcoming Federal Reserve meeting on March 23 was critical since it was coming in the midst of a US banking crisis.
The BSP Monetary Board, which holds its interest rate setting meeting on March 23, is likely to match any action by the US Fed, said Michael Ricafort, chief economist at the Rizal Commercial Banking Corp. INQ
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