Stock market investors will turn their attention to the upcoming July inflation rate for guidance this week, as the benchmark Philippine Stock Exchange index (PSEi) attempts to stay above the 6,600 support level.
Analysts said the release of inflation report on Aug. 6 and the prospects of an August rate cut by the Bangko Sentral ng Pilipinas (BSP) could play a decisive role on the market’s direction.
Investors will also monitor the release of second-quarter corporate earnings of listed firms.
“August is looking to be business relative to prior years, with changes in macro fundamentals concentrated over the latter part of Q3,” online brokerage firm 2TradeAsia.com said.
“Value strategies are reiterated, but additional caution is underscored given the capricious nature of trading alongside the market’s reaction to new inflation/rate/jobs data,” it said.
BSP Governor Eli Remolona Jr. earlier hinted the monetary authorities would likely start cutting interest rates this month as inflation likely peaked in July, while US Federal Reserve chair Jerome Powell also acknowledged that rate cut could be on the table in September.
The market’s immediate support is seen at 6,600 to 6,650 level this week, while resistance is at 6,900.
Last week, the PSEi lost 1.79 percent to close at 6,605.30, while the broader all-shares index dropped 0.79 percent to 3,596.90. The PSEi was up 2.41 percent since the start of the year.
Average daily turnover dipped to P4.9 billion last week from P5 billion a week earlier.
Foreign investors were net sellers last week, with outflows reaching P1.37 billion, a reversal from the previous week’s foreign buying of P1.65 billion.
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