Market seen to take cue from BSP, US inflation

 Stock market investors are expected to keep a close eye on the Bangko Sentral ng Pilipinas (BSP) policy meeting this week, as well as the release of the US October inflation data.

On Friday, the benchmark Philippine Stock Exchange index (PSEi) went down by 26.33 points or 0.42% to close at 6,161.89, while the broader all shares index shed 12.52 points or 0.37% to end at 3,316.86.

Week on week, the PSEi fell by 172.62 points or 2.88% from its close of 5,989.27 on Nov. 3.

“The PSEi saw a limited pullback on Friday despite posting a steep six-day ascent, which to us indicates improving market optimism on resilient earnings, and better-than-expected economic data,” China Bank Securities Corp. Research Associate Lance U. Soledad said in an e-mail.

This week, Mr. Soledad said that the market “could be poised to test higher resistance levels” depending on the results of key events such as the release of the US inflation data and the BSP policy meeting.

“After last week’s strong rebound fueled by positive surprises in local inflation and GDP (gross domestic product) prints, investors will look at this week’s release of US October inflation data and the policy meeting of the BSP to determine the direction of stocks,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.

US consumer price index data is scheduled for release on Tuesday while the BSP will hold its key policy rate meeting on Thursday.

The central bank hiked borrowing costs by 25 basis points (bps) in an off-cycle move last month, bringing the key rate to a fresh 16-year high of 6.5%. The BSP has raised policy rates by 450 bps since May 2022.

A BusinessWorld poll conducted last week showed that 15 of 18 analysts expect the Monetary Board to keep benchmark interest rates unchanged at 6.5% during its Nov. 16 meeting.

On the other hand, three analysts see the BSP raising borrowing costs by 25 bps to 6.75%

“The market found grace this week from favorable macro-economic data that gave enough escape velocity to shortly make a trip to 6,200. Sustainability will be called into question; more positive surprises in data [plus] reallocation and window dressing come December should help with this regard,” online brokerage 2TradeAsia.com said in its report on Friday.

2TradeAsia.com placed the PSEi’s support at 6,000 and resistance at 6,300 while Mr. Colet put the index’s support and resistance at between 6,050 and 6,250. — Sheldeen Joy Talavera