Markets await PH inflation, growth data
Philippine Stock Exchange (PSE) Building. PHOTO BY ENRIQUE AGCAOILI
PHILIPPINE inflation and first-quarter gross domestic product (GDP) figures are expected to influence share movements this week, analysts said, as these could provide hints on where interest rates are headed.
The bellwether Philippine Stock Exchange index (PSEi), which barely moved last week following the expected non-move from the US Federal Reserve, closed 0.2 percent lower week-on-week at 6,615.55 last Friday.
Profit-taking hit the bourse last week, with Philstocks Financial Inc. senior research analyst Japhet Tantiangco saying that investors maintained a “cautious” stance amid persistent macroeconomic headwinds.
While episodes of bargain hunting are expected this week, Tantiangco said the PSEi can still be “ultimately” dependent on fresh economic data, particularly April inflation and GDP results that are due on Tuesday and Thursday, respectively.
“An inflation print exceeding the upper end of the government’s 2.0- to 4.0-percent target may cause negative sentiment in the market,” he noted.
The Bangko Sentral ng Pilipinas last week issued a 3.5- to 4.3-percent estimate for April inflation, fueling worries that consumer price growth could have accelerated further from the 3.7 percent in March.
Meanwhile, investors are also expected to closely monitor the upcoming GDP report for the first three months of 2024, with the preceding quarter’s 5.6 percent as their benchmark.
“A [first-quarter] GDP growth above 5.6 percent may spur optimism, while one that falls below may weigh on the bourse,” Tantiangco explained.
For online brokerage 2TradeAsia.com, intraday selling pressure has limited the PSEi’s movement, making rallies “short” and the general trend “unexciting.”
“Positive gaps in the chart open up opportunities for range trading and modest gains in the very short term. A deluge of analyst briefings and corporate guidance [this week] may help rouse animal spirits — maximize potential yield by locking in at currently depressed prices,” it added.
Rizal Commercial Banking Corp. chief economist Michael Ricafort, meanwhile, said there could be “healthy bottom fishing” in the market if no further geopolitical tensions abroad would be reported going forward.
“Middle East tensions [have] somewhat subsided for now between Israel and Iran, with no new response or retaliation after the last one reportedly by Israel through missile attacks on Iran more than two weeks ago,” he said.
Chart-wise, analysts said the stock market’s support would be between 6,400 and 6,500, while resistance would remain at 6,700.