Investors will be positioning ahead of the latest Philippine inflation report on Wednesday as they look forward to the economy’s prospects in the second half of the year.
The benchmark Philippine Stock Exchange index (PSEi) closed the previous week higher by 1.2 percent to 6,468.07.
“[I]nvestors will be digesting a number of economic data releases this week, with the Philippine June inflation print being the most keenly awaited for signs of a sustained relief in consumer prices,” Juan Paolo Colet, managing director at investment bank China Bank Capital Corp., said in a note to investors over the weekend.
“A large decline in local inflation, especially one that overshoots median expectations, could spur bullish trades. Any positive market momentum, however, will be hard pressed against the hawkish policy trajectory of the US Federal Reserve,” he added.
The Bangko Sentral ng Pilipinas’ June inflation forecast suggested prices may have cooled from the previous month.
“Absent any surprises, the first trading week of the new semester will likely remain range-bound, with bargain hunters waiting below 6,400 and sellers emerging toward 6,600,” Colet said.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said 6,420 had acted as an important support level for the PSEi over the past eight months. The next support area was pegged at 6,330.97.
He said immediate resistance could be found from 6,590 to 6,630 while breakout could see the PSEi targeting 6,730 to 6,830. —Miguel R. Camus
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