Inflation news may drive market higher
INFLATION data due Tuesday will be the highlight of a shortened trading week, analysts said, with economic growth results now out of the way.
Philippine financial markets will only be open up to Thursday as Malacañang has declared February 9 a special nonworking day to celebrate the Chinese New Year.
The benchmark Philippine Stock Exchange index (PSEi), which has gained for two consecutive weeks, ended 0.32 percent higher week-on-week last Friday at 6,707.25 — its highest close in over 10 months.
With the market “consolidating above the 6,600 level with an upward bias,” Regina Capital Development Corp. Managing Director Luis Limlingan said the investor focus would shift to how consumer prices grew in January.
Japhet Tantiangco, senior research analyst at Philstocks Financial Inc., said a slowdown from December 2023’s 3.9 percent, particularly near or within the central bank’s 2.8- to 3.6-percent forecast, could boost sentiment and in turn “drive the market higher.”
“Aside from this, investors may also watch out for our upcoming labor force survey for clues on the health of the local economy,” he said.
Tantiango also said that despite closing in 6,700 territory last week, the PSEi’s rise was still weak as net market value turnover remained “tepid” on average.
A sustained breach of 6,700 level would suggest that the bourse is testing the validity of its rally, he added, while failed runs would lead to a retest of the market’s 10day exponential moving average.
For online brokerage 2TradeAsia.com, fourth-quarter and fullyear corporate earnings are expected to help the main index “inch closer to 7,000 amid a more exciting macro backdrop now.”
“While most large and mid-caps sport very attractive valuations at the moment, we reiterate our calls on banking, property, power, gaming, and holdings as they come with compelling growth-oriented stories to max out value,” it added.
“Note that the [US Federal Reserve] comments in the January 31st meeting only solidified expectations of a May-June rate cut, which further supports bullish calls in the short-to-medium term.”
Upcoming Philippine economic data also include gross international reserves on February 7 as well as bank loans and M3 growth data due on February 8, Rizal Commercial Banking Corp. chief economist Michael Ricafort said.
Meanwhile, trade deficit, consumer credit, and jobless claims data will drive sentiment in the US markets this week, he added.
Chart-wise, the PSEi’s support is expected to be in the 6,5006,600 range while resistance is seen between 6,900 and 7,000, analysts said.