Analysts expect the stock market to move sideways this week, after last week’s run-up as investors await the US January inflation rate data.
“The market has had a good run so far but will face increased pressure to consolidate below the psychological resistance at 7,000,” China Bank Capital managing director Juan Paolo Colet said.
Colet said key events that could influence overall market direction this week are the release of the US January consumer price index and the outcome of the Bangko Sentral ng Pilipinas (BSP) monetary policy meeting.
Colect said while the BSP would likely keep its policy rate unchanged, it would also maintain a hawkish tone in view of upside risks to domestic inflation.
“Given that many market participants do not expect the BSP to cut rates ahead of the US Federal Reserve, investors will pay close attention to how this week’s US inflation print will feed into the timing of a dovish shift in US monetary policy,” Colet said.
The main composite index rallied by 142 points, or 2.13 percent, last week to close at 6,850, as January inflation rate settled within the government’s target.
Average daily value traded improved to P5.81 billion, up 13 percent week-on-week, while daily net foreign buying went up to P583 million, or 350 percent higher week-on-week.
Aside from key macroeconomic data, investors will also await the release of full-year financial results of listed firms. So far, banks reported strong 2023 financial results.
The market support is seen at 6,700 and resistance at 7,000 this week.
Analysts said that while the index was nearing the 7,000 resistance level, more positive catalysts are needed to hit that level, including continued increase in trading value and foreign buying.