Local shares are expected to move sideways this week as investors brace for the release of April 2024 inflation rate and other key macroeconomic data.
The Philippine Statistics Authority is set to release the April consumer price index on May 7 and the first-quarter gross domestic product on May 9.
Other macroeconomic reports slated for release this week are trade deficit/imports/exports on May 8; employment and bank loans (May 9) and domestic liquidity (May 9).
Rizal Commercial Banking Corp. chief economist Michael Ricafort said these macroeconomic reports would have an impact of the upcoming Bangko Sentral ng Pilipinas’ policy rate-setting meeting on May 16.
Ricafort said the BSP could match the US Federal Reserve’s latest rate pause on May 1, 2024 to maintain healthy interest rate differentials to help support/stabilize the peso exchange rate, import prices and overall inflation.
He said a pause in local policy rates is possible if the peso exchange rate remains relatively stable, global crude oil prices continue to drop and headline inflation remains within the BSP’s inflation target of 2 percent to 4 percent.
“Going forward, if geopolitical risks/tensions, especially between Israel and Iran/Hamas/Houthis/Hezbollah/other proxies, including all the possible bad news are already priced in and no further response/no further escalation between Israel and Iran, there could be some healthy bargain-hunting/bottom-fishing in the market,” Ricafort said.
Online brokerage firm 2TradeAsia.com said the deluge of first-quarter financial reports over the next two weeks could provide a boost to the market over the short term.
“Index movement has been capped by intraday selling pressure, keeping rallies short and the overall trend generally unexciting, Positive gaps on the chart open up opportunities for range trading and modest gains in the very short term,” 2TradeAsia.com said.
The market’s immediate support is seen at 6,400, and resistance at 6,750.
The benchmark Philippine Stock Exchange index closed 13 points lower, or 0.20 percent, to 6,615.55, while the broader all-shares index inched up by 0.16 percent to 3,498.17.
Average daily value traded declined to P4.4 billion from the previous week’s average of P9.69 billion.