The PH stock index is expected to maintain growth, exceeding 7,000

Philippine stocks are expected to maintain their upward momentum in this shortened trading week as the likelihood of a US Federal Reserve rate cut has increased given the minutes of its July meeting.

Financial markets will be closed on Monday in observance of National Heroes Day.

Online brokerage firm 2TradeAsia.com said minutes from meetings in July and February showed officials were more unanimous about easing inflation stabilization policies.

“August inflation data and employment data should confirm the scale of the Fed’s actions for the rest of the year,” 2TradeAsia.com reports.

Analysts expect the Fed to make two or three rate cuts between September and December, which could take rates to between 4.50 percent and 4.75 percent, assuming a 75 basis point cut.

“With central banks under increasing pressure to keep up the pace of the Fed’s sharp rate cuts in late Q3 and Q4, this tailwind should continue into the medium term for the more cyclically-oriented PSEi,” 2TradeAsia.com said.

Market support this week is at 6800, while resistance is in the 7000-7050 range.

The Philippine Stock Exchange benchmark rose 1.67 percent last week to close at 6,962.96 points, while the broader all-share index rose 1.58 percent to 3,749.73 points.

Except for the real estate index, which fell 1.5 percent, all sub-indices ended the day in the green.

The average daily trading value rose to PHP6.93 billion, with foreign investors emerging as net buyers, with a total net inflow of PHP6.36 billion, compared to a net inflow of PHP1.77 billion in the previous week.

Since the beginning of the year, the reference index has increased by 7.96 percent.