MANILA, Philippines —The stock market is seen resuming its climb this week as investors are expected to capitalize on the momentum provided by the country’s lower June inflation print.
Despite closing in the red last Friday, the Philippine Stock Exchange index (PSEI) managed to grow by 1.26 percent week-on-week to 6,492.75.
2TradeAsia.com in its report said the PSEi was able to grab on the previous week’s momentum and leverage local investors’ optimism from improving inflation along with the Bangko Sentral ng Pilipinas’ dovish stance.
“The local market was able to close higher last week despite episodes of profit taking in the start and end of the week. We’re seeing a build up of upward momentum as the market was able to maintain its ground above 6,400 and at the same time break above its 50-day exponential moving average,” Philstocks Financial research manager Japhet Tantiangco said.
However, Tantiangco said value turnover was still not convincing as many investors continued to stay on the sidelines.
For this week, he said the market could be able to extend its upward movement, primarily due to the latest inflation print which showed a slowdown.
Inflation eased in June to 3.7 percent, its lowest level in four months.
“The latest inflation data is seen to be supportive of prospects of a rate cut soon by the Bangko Sentral ng Pilipinas which in turn is positive for the market,” Tantiangco said.
Further, he said investors are likewise expected to watch out for the US’ June inflation print this week which would provide clues on the Federal Reserve’s policy direction.
“Investors are also expected to watch out for clues on our local economy through our upcoming labor market, foreign trade and foreign direct investments data,” Tantiangco said.
2TradeAsia.com said some consolidation could be anticipated as chart-wise, the index has had historical staying power around the 6,500 zone.
“Relatively critical weeks ahead as global central banks contemplate on intervention,” it said.
Immediate support is seen at 6,350 to 6,400 while resistance is at 6,600 to 6,700.
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