The Philippine stock market is poised for a “Santa Claus rally” on the last trading days of 2023 amid renewed optimism for 2024.
Philstocks Financial Inc. research analyst Claire Alviar said the prevailing optimism, mirroring the trends in Asian markets, persisted after the US Federal Reserve provided a dovish outlook for 2024.
The recent move of the Bangko Sentral ng Pilipinas to keep interest rates unchanged also boosted investment sentiments at home.
Online brokerage firm 2TradeAsia.com said investors welcomed the dovish signals from the Fed and await possible three rate cuts for next year.
“The US Fed is now expressing confidence to hit 2 percent inflation target in the medium to long term, even broadcasting a Fed funds are of 4.6 percent by 2024 versus 5.1 percent projection last December,” 2TradeAsia.com said.
“While we still think jobs data can be a wildcard especially heading into Q1 2024, baseline scenario if 3 quarter-point cuts next year is becoming more and more visible at this point,” it said.
The bellwether Philippine Stock Exchange index rallied last week to breach the 6,400 level as investors went on a buying spree.
The index surged by 243 points, or 3.9 percent, week-on-week to close at 6,478 Friday.
Supported by strong market participation and net foreign inflows, the average market turnover improved 30 percent week-on-week to P10.2 billion.
If the rally continues, market support for this week will be at 6,400 while resistance is at 6,700, according to analysts.