Philippine stocks are expected to trade sideways this week ahead of the release of December inflation data, which will be a key indicator for the Bangko Sentral ng Pilipinas’ (BSP) next policy action.
Analysts said the BSP is expected to use the December inflation data to determine its next policy move. The BSP earlier forecast December 2024 inflation to settle between 2.3 percent and 3.1 percent.
“Eyes are going to be on the Philippines’ December inflation data as this will provide clues on the BSP’s policy outlook,” said Philstocks Financial Inc. research head Japhet Tantiangco. “An inflation print within the BSP’s 2.3 percent – 3.1 percent range forecast, especially one biased to the lower end, may boost sentiment next week.”
He said investors are also expected to watch the country’s November 2024 labor force survey for signs of strength in the local economy.
Tantiangco said the continued strengthening of the peso against the dollar could also help lift market sentiment.
This week, market’s major support is still seen at 6,400. Major resistance is seen at 6,800.
The bellwether Philippine Stock Exchange Index rose 1.15 percent last week to close at 6,603.81.
The market has been on an upward trend since the last trading week of 2024 after dropping to the 6,400 level.
However, trading value has remained thin, which analysts said could imply weak market conviction.
“The plays for 2025 are set against a backdrop of numerous uncertainties in the macro but with attractive valuations at the corporate level,” online brokerage firm 2TradeAsia.com said.
“As such, central themes for this year are likely to be sector-specific and story-driven, to preserve returns amidst swings in the macro environment,” it said.
