PHILIPPINE SHARES may rise this week after September inflation fell below 2% for the first time in four years, supporting bets for more interest rate cuts by the Bangko Sentral ng Pilipinas (BSP).
On Friday, the Philippine Stock Exchange index (PSEi) rose 1.06% or 79 points to close at 7,467.92, while the broad index of all shares rose 1.48% or 58.99 points to end at 4,041.65.
This was the PSEi’s best finish in more than two and a half years or since it closed at 7,502.48 on Feb. 9, 2022.
On a weekly basis, the PSEi rose 0.53% or 39.62 points from its close of 7,428.30 on September 27, entering its fifth consecutive week of gains.
“The bellwether index remained strong but picked up late in the week after local inflation hit a four-year low. After a weak start, the PSEi managed to gain,” 2TradeAsia.com said in the market book.
“Despite episodes of profit-taking, the local market still managed to close the week with gains and in the process closed above 7,400,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.
This week, inflation data released on Friday could boost Philippine stocks, he said.
“Expected lower inflation in the Philippines in September appears to be boosting markets due to positive effects on the local economy. A lower inflation rate would mean stronger household consumption, which would benefit our overall economic growth given its large contribution. “Inflation also strengthens the issue of continuing the monetary policy of the BSP,” said Mr. Tantiangco.
Inflation eased to 1.9% in September from 3.3% in August and 6.1% last year, the Philippine Statistics Authority reported on Friday.
This was below the BSP’s forecast of 2%-2.8% for the month and the 2.5% average achieved BusinessWorld a survey of 15 analysts. It was also the slowest in four years or since the 1.6% print in May 2020.
In the first nine months, headline inflation averaged 3.4%, in line with the BSP’s full-year forecast.
However, Mr. Tantiangco warned that the escalating conflict in the Middle East is a risk to the market. “Increasing unrest is expected to increase oil prices and create negative spillovers in the global economy. It is expected to reduce emotions.”
“According to the chart, the market may continue to test the 7,400 level. If it holds on to the said line, this will be considered as its support, while its next resistance is seen at 7,700,” he added.
Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in an email that the immediate support for the PSEi is at 7,060-7,220 and the resistance is at 7,552.70-7,800.
On the other hand, 2TradeAsia.com it placed immediate market support at 7,100, primary resistance at 7,500, and secondary resistance at 7,650. – Revin Mikhael D. Ochave
Source link
