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By Revin Mikhael D. Ochave, Reporter
PHILIPPINE STOCKS are expected to decline this week as investors continue to absorb news about the country’s inflation rate and the forthcoming release of other economic data.
The index of the Philippine Stock Exchange (PSEi), made up of 30 members, ended Friday at 7,134.56, a decrease of 59.57 points or 0.82% compared to the previous session.
Week-over-week, the main index rose 343.1 points or 5.05%, improving from the downtrend it registered in the previous week.
Average market turnover value fell 40.76% to P9.73 billion, while overseas net sales decreased 62.29% to P590 million.
“Optimism surged again from encouraging reports about vaccine availability next year, pushing the bulls to regain some buying momentum,” online broker 2TradeAsia.com said in a market note.
Philstocks Financial, Inc. senior research analyst Japhet Louis O. Tantiangco said he sees a downward trend for the local market in the coming week of trading following faster-than-expected inflation in November.
“Investors are expected to look to upcoming economic data, including our September foreign direct investment and October foreign trade, for more clues about our economic condition,” Tantiangco said in a mobile phone message. “Our data still conveys a challenged local economy as recent typhoons exacerbate our pandemic situation.”
Regina Capital Development Corp.’s director of sales, Luis A. Limlingan, said market movement may vary as investors will examine the latest inflation figure.
“Investors will assess whether inflation was due only to (recent) typhoons and whether the Bangko Sentral ng Pilipinas (BSP) will continue to aggressively cut rates,” Limlingan said in a mobile phone message.
“Eyes will be on the December 17 meeting of the BSP Monetary Board. Another rate cut of the same degree will bring policy rates below 2%, ”said 2TradeAsia.com. “The lower rates will not only bolster business confidence in the United States as capital costs decline, but the effect will be twofold for equities as this increases the attractiveness to switch fixed income securities.”
Inflation accelerated to a 21-month high of 3.3% last month from 2.5% in October and 1.3% in the same month last year amid faster rallies in the prices of heavily weighted food and non-alcoholic beverages, they showed. the data released on Friday.
Inflation has averaged 2.5% so far this year, still within the BSP’s 2-4% target and the government’s updated projection of 2.4-2.6% this year. However, this is higher than the central bank’s forecast of 2.4%.
2TradeAsia.com said that immediate market support will be at 7,000 and resistance will range from 7,200 to 7,350.
“As we move into the final weeks of the year, we may have to look at whether investors are willing to hold critical support at 7,000,” said Timson Securities, Inc., director of online trading and trader Darren Blaine T. Pangan.
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