Share prices are expected to consolidate above the 6,000 level this week despite the lingering risks to economic and financial stability amid an elevated interest rate environment.
Analysts said interest rates were expected to remain high as the Bangko Sentral ng Pilipinas would likely continue with its tightening measures to cool down inflation. The inflation rate shot up to an almost 14-year high of 7.7 percent in October from 6.9 percent in September, fueled by fast price hikes in food and beverages.
The US Federal Reserve last week increased the policy rate by 75 basis points. The BSP said it would match the Fed’s rate hike in its next policy meeting this month.
Online brokerage firm UTradeph.com said while the inflation rate soared above expectations and the Fed’s rate outlook was upgraded, several catalysts could support the index above the 6,000 level. Utrade said the BSP’s move to match the US Fed rate hike would help fight rising inflation and support the Philippine peso.
“We see robust support at the 6,000 level support despite the corrective pressures as the earnings season progresses,” Utrade head of research Gabryle Aguila said.