Volatile trade seen ahead of August inflation data
SHARES could continue to climb this week on sustained bargain hunting, but trading could be volatile as investors await the release of August inflation data.
The Philippines Stock Exchange Index (PSEi) rose 104.37 points or 1.58% to close at 6,692.65 on Friday, while the broader all-stock index rose 50.49 points or 1.44% to 3,548.53.
Week over week, the PSEi is down 59.85 points or 0.89% from its close of 6,752.50 on August 26.
“The index posted a sharp rise [on Friday] as bargain hunters took action after the recent pullback, which resulted in the successful test of the 6,500-6,600 support level,” said Rastine Mackie D. Mercado, Research Director of China Bank Securities Corp. ., in an email.
“The local market ended the week on a strong note, nearly erasing a 183 point midweek decline as investors repositioned themselves ahead of US labor data,” the online brokerage said. 2TradeAsia in a report.
For this week, Mercado said the market may be moving with an upward bias at the start of Friday’s upside momentum.
“We see [Friday’s] the bullish momentum will continue into early next week after the successful test of the 6,500-6,600 support,” Mercado said.
However, this bullish momentum will likely be accompanied by heightened volatility as investors react to key economic data, he said. These include US employment data released on Friday and the Philippines for August inflation report is due out on September 6, Tuesday,
The US Department of Labor’s jobs report released on Friday showed nonfarm payrolls rose by 315,000 jobs last month after jumping 526,000 in July, marking the 20e consecutive month of job growth.
During this time, a Business world A poll of 13 analysts gave a median estimate of 6.4% for August inflation, within the Bangko Sentral ng Pilipinas forecast of 5.9-6.7% and stable from the July level.
If realized, it would beat the central bank’s annual target of 2-4% for the fifth consecutive month and its forecast of 5.4%, and would also be faster than the 4.4% print of the same month last year.
Philstocks Financial, Inc. senior research analyst Japhet Louis O. Tantiangco said hawkish signals from the US Federal Reserve will continue to affect the local market.
“The Federal Reserve’s aggressively hawkish policy outlook is expected to weigh further on the local market [this] week, especially if rising US interest rates and falling Philippine peso continue,” Tantiangco said in a Viber message.
The peso closed at a new all-time low of P56.77 on Friday, down 35 centavos from its finish of P56.42 on Thursday, according to data from the Philippine Bankers Association.
Year-to-date, the peso has weakened P5.77 or 11.31% from the P51 close on December 31, 2021.
China Bank Securities’ Mr. Mercado placed PSEi support in the 6,500-6,600 range and resistance at 6,900, while Philstocks Financial’s Mr. Tantiangco placed support at 6,600 and immediate resistance at its average 200-day exponential moving of 6,734.81. — Justine Irish D. Tabile