US inflation, BSP move to sway market

LOWER US inflation and steady domestic interest rates could boost investor sentiment this week, analysts said.

The benchmark Philippine Stock Exchange index (PSEi), which posted a 0.43-percent drop last Friday, still managed to end 2.88 percent higher week on week at 6,161.89.

Share prices had rallied for most of the week ahead and immediately after the release of domestic inflation and second-quarter growth data that exceeded market expectations.

“[I]nvestors will look to this week’s release of US October inflation data and the policy meeting of the BSP (Bangko Sentral ng Pilipinas) to determine the direction of stocks,” China Bank Capital Corp. Managing Director Juan Paolo Colet said.

“If US consumer price pressures show clear signs of further easing and the BSP keeps its policy rate steady [this Thursday], then market participants could build a cautiously bullish case for equities,” Colet added.

Online brokerage 2TradeAsia.com said the November 14 release of the US October inflation print would be a “vital key” in forecasting the Federal Reserve’s move in its policy meeting in December.

Locally, the positive inflation and third-quarter gross domestic product results will give policymakers and market participants “more breathing space heading into 2024,” it noted.

2TradeAsia.com said sustainability would be called into question this week and that more positive economic data surprises could help the PSEi breach the 6,200 mark as the market gears up for 2024.

“Medium-term wildcards will be on potential demand gradients, especially as activity in the fourth quarter will be driven by weaker purchasing power and consumer confidence relative to last year, plus persisting oil and commodity price volatility from regional tensions,” it noted.

Chartwise, the main index could trade within the 6,050 to 6,250 range, analysts said.