Shares may move sideways before key data releases

PHILIPPINE STOCKS may continue to move sideways this week as investors take cues from the upcoming release of key economic data that could bolster bets on a Bangko Sentral ng Pilipinas (BSP) rate cut this month.

On Friday, the Philippine Stock Exchange index (PSEi) climbed by 0.89% or 53.11 points to end at 6,022.24, while the broader all shares index rose 0.85% or 30.23 points to 3,568.34.

Week on week, the PSEi increased by 25.11 points from its 5,997.13 close on Nov. 21.

“The local bourse closed with modest gains, holding above the 6,000 level after a largely sideways week as investors awaited fresh catalysts to determine the market’s next move,” online brokerage 2TradeAsia.com said in a market note. “The index remained waltzing around the 6,000 zone, with intraday moves highlighting its attempt to disentangle from corruption headlines.”

“Whilst hard fought, positive sentiment still took over the local market last week, allowing it to extend its gains and even close above the 6,000 level,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message. “The bourse is still considered on a downtrend, however, as it has not yet surpassed its Oct. 20 peak of 6,141.87.”

For this week, players will monitor key economic reports for leads, he said.

“Investors are expected to look towards the Philippines’ November inflation data, with a low print expected to boost sentiment as it would support BSP rate cut expectations. Investors may also take cues from the S&P Global Philippines Manufacturing PMI (purchasing managers’ index),” Mr. Tantiangco said.

November inflation data will be released on Friday (Dec. 5). A BusinessWorld poll of 15 analysts yielded a median estimate of 1.6% for the consumer price index, within the BSP’s 1.1-1.9% month-ahead estimate. If realized, this would ease from the 1.7% clip in October and the 2.5% logged in the same month a year ago. This would also be the slowest since the 1.5% print in August and would mark the ninth straight month that inflation fell below the central bank’s 2-4% annual target.

Meanwhile, PMI data will come out on Monday (Dec. 1).

“Finally, investors may monitor the peso’s movement, with a further appreciation expected to help the local market,” Mr. Tantiangco said. “Chart-wise, the PSEi may continue to test the 6,000 level. If it is able to hold its position at the said line, this will be considered as its support while next resistance is seen at 6,150. The local market is currently trading above its 10-day and 50-day exponential moving averages, reflecting positive momentum.”

Meanwhile, 2TradeAsia.com said the Nov. 30 anti-corruption protests could serve as a short-term catalyst for the market. “[These] could spike volatility but underscore long-term reforms badly needed to finally reduce country risk that has plagued equities.”

It placed the PSEi’s immediate support at 5,800 and resistance at 6,000, with secondary resistance at 6,100. — Alexandria Grace C. Magno