The Philippine Stock Exchange index (PSEi) is expected to perform with a downward bias as investors track the expected decision of the US Federal Reserve (Fed) to increase interest rates this month. The absence of catalysts in the domestic arena may also drive the market to remain lower.

Here are three fast facts on projected stock performance from March 13-17:

1. The PSEi will track the investors’ sentiments over the decision of the Fed for another interest rate hike.

The Fed is expected to increase rates following the release of the US nonfarm payrolls. The US Labor Department reported that nonfarm payrolls rose by 235,000 jobs as the construction sector recorded its largest gain in nearly a decade due to unseasonably warm weather.

“Most investors have already discounted that a rate hike will be announced when the Fed officials convene,” Business World reported Luis A. Limlingan, managing director at Regina Capital Development Corp., as saying. The latest US jobs report raised the possibility of the Fed to increase rates by 92 percent.

Two weeks prior the expected decision, Fed Chair Janet Yellen has signaled that the central bank could keep its projections of possible interest rate hikes as it monitors the progress of the US economy under the newly inaugurated President Donald Trump’s administration. Economists expect that the Fed to increase rates following rising inflation, together with a tighter labor market, stock market boom and the strengthening of the global economy.

2. The PSEi rebalancing could also influence market performance.

The PSEi will have its rebalancing on Monday as Puregold Price Club will be listed at the PSEi to replace Emperador from the sector indices. The Philippine Stock Exchange (PSE) PSE noted back in February that the companies need to be in the top 25 percent by median daily value and must be in the top 30 on full market capitalization to qualify for the listing.

Analysts said that Friday’s weak performance was also influenced by rebalancing woes as investors align their portfolios. The PSEi rebalancing also attributed to the significant weight reduction for SM Prime Holdings, Inc (PSE: SMPH) shares which declined by 9.24 percent.

3. The PSEi is seen to remains range bound between the 7,000-7,400 levels in the near term.

BDO Unibank Chief Strategist Jonathan Ravelas said that the market’s close of 7,146.27 on Friday continue to suggest that this is the PSEi’s range. “A break below 7,000 could call for further losses toward the 6,800-6,850 levels in the near term,” The Philippine Daily Inquirer reported Ravelas, as saying.

What do you think of the PSEi forecast for March 13-17? Let us know in the comments section below.