Local stocks are expected to move sideways with an upward momentum this week on the back of improving macroeconomic conditions.
Analysts said the continued decline in inflation rate, the strong first-quarter economic performance and the overall positive first-quarter earnings results of listed companies are among the factors boosting investor sentiments.
The downtrend in consumer prices is also implying that there’s room for the central bank to pause monetary tightening, they said.
“The local Monetary Board meeting this week is widely expected to follow this dovish trail, seeing as PH inflation tracks global price cooling; a lower 25 basis points hike is floating around the street, but a pause is totally not out of the table,” online brokerage firm 2TradeAsia.com said. The Monetary Board’s next policy meeting is set on May 18.
Analysts said despite improving economic situations, profit takers would be quick in cashing in on gains to take advantage of the short rally. Investors are also expected to remain cautiously optimistic as downside risk drivers such as inflation and interest rate are expected to be less challenging in the second half of the year.