Index may break 6,300 mark

MANILA, Philippines — A break above the 6,300 level could happen this week as investors accumulate shares following favorable inflation numbers last month, analysts said.

“Following the better-than-expected outcome of November inflation at 4.1 percent, in our view, a break above 6,300 is warranted.The lower-than-expected result also opens the potential for inflation to be within the Bangko Sentral ng Pilipinas’ two to four percent target band by December, as moderating oil prices after its peak in September and strengthening peso will contribute to the deceleration of inflation amid the seasonal boost in spending,” Unicapital Securities said.

For its part, 2TradeAsia said the driving themes for next year would be growth and interest rate with cooling global inflation, plus slower economic activity after a year of sharply higher capital costs.

Investors would also be keeping a close watch on the US Federal Reserve’s last meeting for the year, happening on Dec. 12 and 13, “with expectations of a no-change pretty much set in stone.”

Against this backdrop, the BSP may have the room to cut rates as early as May 2024.

“We caution that these are not baseline expectations and therefore likely to come down as first quarter numbers materialize, but these positive projections signal that risk investors are likely heading to a place of more power, especially relative to where forecasts were last year,” 2TradeAsia said.

The Philippine stock market was range-bound last week with the benchmark Philippine Stock Exchange index (PSEi) closing lower by 0.17 percent week-on-week to finish at 6,234.

Counters were mixed, but mostly down and the average turnover was significantly down by 26.88 percent week-on-week to P4.28 billion. This, as net foreign buying eased to P18 million on average or a decline of 96.22 percent from the previous week.

Against this backdrop, 2TradeAsia sees immediate support at 6,100 to 6,150 with resistance at 6,400.