Shares may move sideways before holiday break

PHILIPPINE SHARES may trade sideways this week as investors stay cautious ahead of the holiday break and amid a lack of catalysts.

On Friday, the bellwether Philippine Stock Exchange index (PSEi) dropped below 6,000 again, falling by 1.83% or 110.61 points to end at 5,920.87, while the broader all shares index declined 1.42% or 49.24 points to close at 3,397.72.

Week on week, the PSEi decreased by 115.85 points from its 6,036.72 close on Dec. 12.

“The local bourse’s early-week momentum dissipated Friday as pre-holiday de-risking pulled the PSEi below the 6,000 psychological floor,” 2TradeAsia.com said in a market note.

“The local market declined last week with investors immediately taking gains from the prior week’s rally, as trust towards the local economy’s growth prospects remains weak. Ultimately, anemic confidence remains as the local market’s main problem,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

Mr. Tantiangco said the market could continue to move sideways during this shortened trading week. Philippine financial markets are closed on Dec. 24-25 for the Christmas holidays.

“Investors are expected to maintain their cautious stance. Investors may sell positions to shield themselves from any possible negative developments over the holidays. Investors are also expected to watch out for fresh leads,” he said.

“On a positive note, the local currency’s appreciation, if it continues, is expected to provide support to the local bourse. Given all of these, next week, the market could move sideways.”

He added that with the PSEi returning to the 6,000 level last week, the market may continue to move within this range.

“The market’s MACD (moving average convergence/divergence) line is about to cross the signal line. If this continues, it will signal bearish momentum for the bourse. If the market is unable to get back above 6,000, its next support is seen at 5,800.”

“Locally, the approaching holiday break points to thin trading volumes, with most funds shifting focus toward 2026 positioning,” 2TradeAsia.com said.

It said the market remains cautious amid governance risks due to the lingering concerns over the scandal surrounding the use of public funds for allegedly anomalous infrastructure projects.

“Next year’s theme centers on identifying rebound angles in undervalued cyclicals and defensives, supported by resilient consumption and potential infrastructure acceleration,” it said.

“With holiday liquidity potentially capping downside and valuations offering attractive entry points, disciplined accumulation in quality names positions portfolios well for 2026 upside.”

It placed the PSEi’s immediate support at 5,800 and resistance at 6,000, with secondary resistance at 6,100. — Alexandria Grace C. Magno