Inflation, GDP results to weigh on sentiment

OCTOBER inflation and third quarter economic growth data due this week will be on investors’ minds and impact the stock market’s performance, analysts said.

With trading limited to just two days due to several holidays, the benchmark Philippine Stock Exchange index (PSEi) ended last week below the 6,000 level but managed a 0.46-percent week-on-week gain to 5,989.27.

Japhet Tantiangco, Philstocks Financial Inc. senior research analyst, said the release of the inflation print on Tuesday and the gross domestic growth (GDP) data on Thursday would have a major impact on the bourse’s performance this week.

An inflation rate lower than September’s 6.1 percent and a strong rebound in GDP growth for the third quarter could “spur optimism in the bourse,” Tantiangco said.

“If we don’t see such, however, tepid expectations for the local economy could remain, which in turn may keep the market downwardly biased,” he added.

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China Bank Capital Corp. managing director Juan Paolo Colet and Rizal Commercial Banking Corp. chief economist Michael Ricafort also said that investors were looking forward to the inflation and growth results.

“Investors will have their eyes on important Philippine economic data this week to assess whether our local market can rally above the 6,000 resistance,” Colet said.

A bullish spillover to domestic stocks could result if consumer price pressures eases and if the country’s growth picture improves.

Ricafort said that investors would also be awaiting the latest gross international reserves, agricultural output, and employment data.

Online brokerage said that along with macro indicators, major earnings results would help the main index gather some momentum “heading into what is historically a more buoyant November-December-January run.”

Chartwise, the stock market is expected to retest the 6,000 level. The main index is seen trading in the 5,900-6,150 range, analysts said.

Mike Ibanoz

Mike Ibanoz is an Emmy Award-winning journalist who has spent the better part of two decades covering gadgets and apps, and helping people make smarter tech decisions.

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