Share prices are expected to consolidate in this shortened trading week as investors await the release of November inflation data and the results of the upcoming policy meeting.
Online brokerage firm 2TradeAsia.com said the inflation report would be a key factor in determining the Bangko Sentral ng Pilipinas’ move in its meeting this month.
The BSP last week said November inflation could go from a range of 7.4 percent to 8.2 percent, driven by higher power rates and increases in the prices of agricultural products stemming from the damage caused by typhoon Paeng and higher prices of cooking gas.
BSP governor Felipe M. Medalla also hinted about a possible increase of 25 to 50 basis points in the benchmark rate this month.
Analyst said that aside from the November inflation data, the BSP’s move would also depend on the US Federal Reserve’s action.
“Shorter trading weeks are coming ahead, leaving benchmark index an opportunity to consolidate over the Yule,” 2TradeAsia.com said.
“Finding the correct play for 2023 is going to be the crux of most trades in the next few weeks. Monitor possible spikes in volume as funds find rationality over this wall of worry,” it said.
The PSE index, the 30-company bellwether of the Philippine Stock Exchange, dropped 1.78 percent last week to close at 6,489.65, while the broader all-share index slipped 0.95 percent to end the week at 3,419.65.
Global stock markets were mixed Friday after strong US jobs data raised concerns that the Fed may continue to aggressively hike interest rates to tame inflation.
US government data showed that the world’s biggest economy added 263,000 jobs in November, with the unemployment rate remaining at 3.7 percent. Government figures also indicated a bigger jump in hourly wages than analysts had benchmarked.
Indices in New York initially tumbled on the release as markets feared it would extend the period of ultra-aggressive Federal Reserve interest rate hikes to counter inflation. But markets recovered throughout the day, with the S&P 500 ending down 0.1 percent.
Investors were unnerved by the jump in wages “because that tends to feed inflation,” said Quincy Krosby of LPL Financial
But traders also realize that “there’s a positive side to this,” she said. “The Fed has the luxury if you will to continue to raise rates, with smaller rate hikes. And the labor market remains resilient.”
The jobs data comes two days after Federal Reserve Chair Jerome Powell signaled the central bank could moderate its aggressive posture on interest rates as soon as this month.
Earlier, London finished flat, while Frankfurt gained modestly and Paris dipped.
Investors were also focused on the oil market, where prices finished lower amid focus on talks on a price cap to limit Russia’s oil revenues.
The G7 and EU agreed a $60-per-barrel price cap on Russian oil late Friday. Analysts were still assessing the effect of the price ceiling, but have said the impact on supply could be limited because Russia currently sells some oil below this price level.
Traders are also focused on OPEC+, which may decide Sunday to slash oil production further to boost prices for its members, which include Saudi Arabia and Russia.
“There remains considerable uncertainty around the action OPEC+ will take when it meets,” noted OANDA trading platform analyst Craig Erlam.
Among individual companies, Boeing jumped 4.0 percent following a Wall Street Journal report that United Airlines is close to agreeing to order dozens of Boeing 787 Dreamliners. United shares were flat. With AFP