The local stock market has turned bearish again following jitters caused by US tariff plans which are seen to continue hounding the bourse although sentiment may change depending on March inflation numbers that will be released late this week.

“We still see global economic outlook concerns caused by the US’ protectionist stance posing downside risks to the local bourse,” said Philstocks Financial Research Manager Japhet Tantiangco. 

He noted that, “In line with this, investors are expected to watch out for the implementation of the US’ upcoming reciprocal tariffs to see if there will be any adjustments. Any new tariff announcement from the US government is expected to pull the local bourse lower.”

Online brokerage 2TradeAsia.com said “The recent escalation in the tariff war has already led to significant real-world impacts between the US and the concerned economies....

“This has been the expected impact, as also taught by seasoned market participants--in the days where it was just US and China circa 2018— but nevertheless sentiment-negative and just complicates the opaqueness of long-term fundamentals, specifically inflation.”

“On a positive note, hopes that the BSP will cut rates in their April meeting may help lift sentiment. In connection to this, investors are expected to watch out for our March inflation due on Friday as this will give clues on the BSP’s next policy moves,” Tantiangco said.

For its part, 2TradeAsia.com said that, “As the first quarter officially comes to a close, the upcoming earnings season should provide critical insights-especially following outperformance in fourth quarter earnings.”

It added that, “potential consumption bump and traffic activity from the midterm elections may provide some second wind to cyclicals. This is further underpinned by the current level of valuations, where the low entry point allows more accommodation of risk.”

However, the brokerage said that “the upcoming second quarter (summer and elections) should seasonally have elevated domestic inflation management and balancing act should be in place to remediate further event risks.”

“Sentiment remains relatively fragile above 6,300 as upcoming inflation data and central bank policy rhetoric remain at the forefront, ahead of any mid-year adjustments at the corporate earnings level. 

“We reiterate that rate cuts for the most part are a second-half story, but improving liquidity conditions should help guide near-term price action; lookout for stabilized global appetite and foreign inflows that may be required for the PSEi to break out of its current tight range,” it added.