PHILIPPINE SHARES may climb this week on easing uncertainty at home and with the Bangko Sentral ng Pilipinas (BSP) hinting on more rate cuts this year.

On Friday, the Philippine Stock Exchange index (PSEi) rose by 1.7% or 107.73 points to end at 6,413.10, while the broader all shares index climbed by 1.04% or 38.61 points to 3,746.79.

Week on week, however, the PSEi dropped by 0.81% or 52.43 points from its 6,465.53 finish on May 16, ending its five-week winning run.

“Moody’s Ratings’ sovereign credit rating downgrade on the United States set the tone during the week, leading to volatile trades across markets. Recession odds continue to rise, and the US just recently losing its ‘Aaa’ credit rating,” online brokerage 2TradeAsia.com said in a market note.

“The local market broke its five-week winning streak last week as it fell amid a mix of negative factors from fiscal worries in the US to concerns over President Ferdinand R. Marcos, Jr.’s sudden move to revamp the government. On a positive note, the market was still able to close above the 6,400 level,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

Mr. Marcos on Thursday last week called on Cabinet-level officials to resign as part of the government’s “bold reset.” On Friday, the administration announced that the President decided to retain his Trade, Finance, Budget, and Economic Planning secretaries.

For this week, Mr. Marcos’ decision to keep members of his Cabinet’s economic team may boost market sentiment as it eases uncertainty over the continuity of his administration’s policies, Mr. Tantiangco said.

“Signals from BSP Governor Eli M. Remolona, Jr. of two more possible rate cuts this year may also strengthen market confidence,” he said. “However, concerns over the outlook of the US’ fiscal position amid risks of increasing debt may continue to weigh on the bourse. Investors are also expected to watch out for fresh leads particularly on the trade negotiations with the US.”

Mr. Tantiangco said the PSEi may continue to test its 6,400 support, while resistance is seen at 6,600.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in an e-mail that the PSEi’s minor support is at 6,290-6,300 while resistance is at 6,500.

For its part, 2TradeAsia.com put the bellwether’s immediate support at 6,300 and resistance at 6,650.

“With risks leaning asymmetrical, mid-year outlook will be about finding balance amid macro and micro tensions. Gradual unfolding of the rate path plus fiscal policy will direct flows in the second half, on top of monitoring in margin and cash flow behavior at the corporate level amid elevated uncertainty on the ground,” it said.

“We suggest keeping positioning tight but curious, exposed where the data warrants, but patient where the signal remains incomplete,” it added. — Revin Mikhael D. Ochave