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Tuesday, July 23, 2024

Stock market seen trading sideways on higher inflation

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Philippine stocks are expected to trade sideways this week after last week’s shortened trading week as investors await the release of key March inflation rate.

Online brokerage firm said in its weekly stock market outlook Bangko Sentral ng Pilipinas Governor Eli Remolona Jr. already hinted that March inflation rate may be around 3.9 percent, higher than February’s 3.4 percent.

It said the higher inflation could be due to the sharp movement in food and transportation and as higher power/energy demand with the early onset of the summer season.

“We remain neutral on any earlier than mid-rate cycle changes for these reasons (could even extend up to Q3, further supported by US Federal Reserve’s comments of even stickier US inflation,” it said.

Investors will also focus on first-quarter corporate earnings report and outlook for the second quarter given the bullish indicators in the first two months of the year.

“Our core sector picks are sustained, seasonally strong industries might surprise in the short term: construction, tourism and leisure, energy, aviation, among others,” said.

The bellwether Philippine Stock Exchange index (PSEi) is expected to hover between 6,800 and 7,000 points this week.

“It is likely to stay here in the near-term, pending strong impetus on the macro side,” it said.

The PSEi ended at 6,903.53 last week, up 0.31 percent week-on-week while the broader all shares index finished at 3,607.51, up 0.55 percent from a week earlier.

Average daily turnover improved to P7.92 billion, as foreign investors were net sellers by P2.35 billion.


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