The local stock market is expected to move sideways this week as stocks are at bargain levels, but negative sentiment ahead of inflation data could still impact prices.

“With the market at attractive levels, we may see some instances of bargain hunting. However, we expect lingering concerns to continue to weigh on sentiment,” said Japhet Tantiangco, Research Manager at Philstocks Financial.

He noted that investors will be keeping an eye on the upcoming November inflation data for clues regarding the Bangko Sentral’s policy direction. Additionally, investors will also monitor the S&P Global Philippines manufacturing PMI and labor market data for insights into the local economy.

Tantiangco added, “The US's pivot towards protectionist policies has added another layer of unpredictability to interest rates in 2025. These policies are likely to be inflationary and could affect central banking next year.”

The brokerage also pointed out, “Likewise, expect domestic political conflicts to maintain negative pressure on the macro news cycle, especially if they protract heading into the campaign season in the first quarter of 2025.”

As a result, the brokerage suggests active stock picking, focusing on defensive stocks that are less affected by visible hurdles such as the strong dollar and supply chain disruptions. They also recommend considering more aggressive investments in sectors like decarbonization, climate action (electric vehicles, solar energy, green infrastructure), and finance technology.

For stock recommendations, Abacus Securities Corporation suggests MacroAsia Corporation, noting that its recent drop in share price presents a buying opportunity, especially since it is less impacted by rising fuel and foreign exchange rates compared to airline carriers.

Conversely, COL Financial has a "BUY" rating for Cosco Capital, stating, “We think the stock remains severely undervalued, with the market not valuing its other businesses (apart from Puregold) like the fast-growing liquor business, in our view.”