Philippine stocks may return past the 6,000 level this week on easing inflation and positive third-quarter gross domestic product (GDP) report.
China Bank Capital managing director Juan Paolo Colet said investors would have their eyes on important economic data this week to determine if the market could go back above the 6,000 level.
“After a good trading week in US spurred by views that Federal Reserve is potentially done with its rate hike campaign, we may see a bullish spillover to domestic stocks if the October inflation print on Tuesday shows easing of consumer price pressure and the third-quarter GDP release on Thursday paints a better growth for the economy,” Colet said.
Online brokerage firm 2TradeAsia.com said the major earnings releases this week, coupled withn macroeconomic reports, should help the index get some momentum to break past the 6,000 level.
The index is expected to trade within the 5,900 to 6,150 level this week.
The 30-company Philippine Stock Exchange index eked out gains on last week’s shortened trading as the market rose 27 points, or 0.46 percent, week-on-week to close at 5,989.
Stocks rose Friday after data showed US job growth cooled in October, easing concerns about further interest rate hikes. Oil prices fell on profit-taking despite a softer dollar, which usually boosts demand for crude. Gold prices climbed.
Data showed that while the 150,000 jobs added to the US economy was partly impacted by the US auto strike, it was still less than what analysts had forecast and down from a revised 297,000 in September. With AFP
The slower jobs growth reported Friday by the US Labor Department “has further cemented expectations that the [Federal Reserve] has reached peak interest rates,” said market analyst Fawad Razaqzada at City Index and FOREX.com.
After a fallow two months, equity markets recovered some of their mojo after the US central bank Wednesday left borrowing costs on hold for a second straight meeting and hinted that no more increases were likely.
While Fed boss Jerome Powell left the door open for another rise as officials battle to sustainably bring down inflation, traders were skeptical, with elevated US bond yields seen acting as a substitute for more tightening.
“It seems silly to cheer weakening activity in the labor market, but the key takeaway from this report is that it resonates as a ‘soft landing report’ that will keep the Fed from raising the fed funds rate again,” said Briefing.com’s Patrick O’Hare.
Powell said the Fed was not thinking about cutting rates right now.
“Yet the market is embracing the thought that this employment data could mean the Fed is at least a step closer to starting to think about cutting rates,” O’Hare added.
Meanwhile, the latest surveys of US business activity “painted the picture of consumers who are feeling the pinch following two years of inflation and rapidly rising interest rates,” said Craig Erlam at OANDA.
Wall Street’s three main indices moved higher, with the Dow ending 0.7 percent up.
European stocks failed to hold onto gains, closing mixed.
Asian equity indices rallied, catching up with strong gains Thursday on Wall Street and Europe after the Fed and Bank of England maintained their interest rates as global inflation cools.
Apple shares ended 0.5 percent down after the company reported that sales fell year-on-year for a fourth quarter in a row, although profits rose.
Briefing.com’s O’Hare said the disappointment was tied to the sales guidance for this quarter which works out to a five percent decline in real terms. With AFP