Stocks set to move sideways ahead of US CPI report
PHILIPPINE SHARES could move sideways this week as investors await the release of the latest US inflation data, which could provide clues on the Federal Reserve’s next move, as well as local economic reports.
The benchmark Philippine Stock Exchange Index (PSEi) rose 9.50 points or 0.15% to close at 6,361.82 on Friday, while the broader all-stock index rose 5, 37 points or 0.15% at 3,410.76.
Week after week, the PSEi jumped 196.47 points or 3.19% from its July 1 close of 6,165.35.
Philstocks Financial, Inc. senior research analyst Japhet Louis O. Tantiangco said the market maintained positive momentum last week.
“The sustainability of this rally is questionable, however, amid persistent economic headwinds that may dampen sentiment. up for inflation,” Tantiangco said in a Viber message.
Rizal Commercial Banking Corp. chief economist Michael L. Ricafort said the PSEi rose in a “relief rally” following hawkish signals from the head of Bangko Sentral ng Pilipinas (BSP ).
BSP Governor Felipe M. Medalla said last week that the central bank was ready to raise its key rate by 50 basis points at its August 18 meeting to rein in inflation after the peso broke through on Thursday. the level of P56 against the dollar to approach its all-time high.
Headline inflation hit 6.1% in June, the fastest in nearly four years. That brought first-half inflation to an average of 4.4%, above the central bank’s 2-4% target but still below its 5% forecast for this year.
“The PSE also gained recently as US equity markets hit a nearly month-long high, as global market sentiment is buoyed by China’s planned $220 billion economic stimulus package, mainly through infrastructure spending, as well as recent signals from Fed officials regarding a possible landing or preventing an economic contraction,” Ricafort added.
For this week, he said the market will be watching for the release of US Consumer Price Index (CPI) and Fed Beige Book data on July 13 as it may give some indication of the future policy trajectory. of the US central bank.
“The situation in the financial markets will remain similar as long as the Russian-Ukrainian conflict continues, in terms of relatively high global commodity prices and inflation,” Ricafort said.
He placed PSEi support for the week in the 6000-6100 range and resistance between 6500-6600.
Meanwhile, Mr Tantiangco of Philstocks Financial said that in addition to US inflation data, investors will also take inspiration from upcoming reports on Philippine trade, foreign direct investment and remittances. Filipinos abroad.
He placed immediate support for PSEi at 6100-6150 and resistance at 6350-6400. JIDP. Picture