Philippine Stock Exchange, Bonifacio Global City. / INQUIRER PHOTO/LYN RILLON

Maintaining the winning streak of the local bourse may hinge on the return of foreign investors after an extended New Year vacation, along with the release of domestic inflation data.

Rastine Mercado, research director at Chinabank Securities, said in an email that traders would likely watch how foreign funds would flow, “as well as if any succeeding upticks will be accompanied with much better volumes.”

The benchmark Philippine Stock Exchange Index (PSEi) opened 2025 with two consecutive sessions of gains, and ended last week with a 1.15-percent gain to 6,603.81.

The Frankfurt-based central bank reduced its key deposit rate a quarter point to 3.5 percent, as expected, providing further relief to eurozone households and businesses.

The BSP said maintaining the 20 percent minimum liquidity ratio (MLR) of thrift banks is “appropriate” as this ensures that smaller lenders have enough cash to withstand potential stress events while continuing to meet the funding needs of their clients.

READ: PH likely saw heavier ‘hot money’ inflows in 2024

According to Mercado, total foreign buying reached P45.8 million. Volumes, however, were “sluggish” at a P3-billion average.

Should more foreign funds flow back into local equities, Mercado said the PSEi may continue its rally toward the 6,750 psychological resistance level.

At the same time, Japhet Tantiangco, research head at Philstocks Financial Inc., said investors would also watch out for December inflation data, as this would give hints on the next monetary policy stance of the Bangko Sentral ng Pilipinas (BSP).

“An inflation print within the BSP’s 2.3 percent to 3.1 percent range forecast, especially one biased to the lower end, may give sentiment a boost [this] week,” Tantiangco noted.

Stock trading platform 2TradeAsia.com said investors could take advantage of the market’s current “despondence” and bring it toward 6,700, while support was seen at 6,400 to 6,500.

The PSEi ended 2024 higher by 1.22 percent, marking the first time since 2019 that it closed the year with a gain.

However, this is still far from its peak of 7,500 in October, or before Donald Trump’s victory in the US presidential elections.

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This overall dampened investor sentiment7xm, according to 2TradeAsia, with markets entering 2025 trying to avoid risks. INQ

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