The Philippine stock market is expected to trade cautiously this week as investors await key US and domestic data to gauge the outlook for monetary policy and inflation.
“The market will take its cue from key economic data, specifically the U.S. core PCE price index, which will provide hints on the potential policy path of the U.S. Fed in their September meeting,” said Peter Garnace, a research analyst at Unicapital Securities Inc.
“Locally, investors will position ahead of the release of the inflation print on September 5,” he said.
Garnace expects the benchmark Philippine Stock Exchange index (PSEi) to move within a narrow range of 6,100 to 6,300 this week.
The PSEi lost 0.56 percent last week to close at 6,155.57, as continued foreign selling, which reached P3.8 billion, dampened sentiment. Year-to-date, net foreign outflows amounted to 45.3 billion.
Average daily value traded rose to P9.2 billion from the previous week’s average of P6.5 billion.
Contributing to the cautious tone was the reaction to Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona’s less dovish tone after a 25-basis-point rate cut last week.
Remolona said another rate cut is possible if there are signs of weak demand in the economy. The BSP has two more rate-setting meetings this year.
The onset of the Chinese “ghost month” on Aug. 23 also added to the cautious mood.
