Stocks move sideways ahead of inflation data


STOCKS could move sideways this week amid fears of faster inflation and the market waiting for more guidance from the US central bank on its plan to cut stimulus.

The Philippine Stock Exchange (PSEi) index fell 29.28 points or 0.42% on Friday to close at 6,923.60, while the broader all-stock index rose 0.67 points or 0, 01% to 4,326.51.

Week after week, the benchmark PSEi fell 27.93 points from its ranking of 6,951.53 on September 24.

“[This is] after the US stock markets recently corrected to their lowest level in one to two months, and after the NCR (National Capital Region) alert level or quarantine restrictions [were] maintained until October 15, thus tempering or limiting the reopening of the economy, ”the chief economist of Rizal Commercial Banking Corp. said on Friday. Michael L. Ricafort in an email.

The S&P 500 lost 2.2% week over week, while the Nasdaq was down 3.2% and the Dow Jones Industrial Average was down 1.4%.

Upon returning home, Metro Manila will remain below Alert Level 4 until mid-October, the government said last week. However, restrictions on gyms, restaurants and some personal care services have been relaxed for those fully vaccinated.

For this week, analysts said the leads will include September inflation data, which will be released by the Philippine Statistics Authority on Tuesday, October 5.

“Inflation fears will cap the market on the upside on PSEi’s attempt to break through the 7,000 mark,” Cristina S. Ulang, head of research at First Metro Investment Corp, said on Saturday. in a Viber message.

A Business world A poll of 17 analysts gave a median estimate of 5% for headline inflation for September, closer to the high end of the central bank’s estimate of 4.8% to 5.6% for the month and above its target of 2-4% for the year. If achieved, it will be faster than the 4.9% in August as well as the 2.4% a year earlier. It will also be the fastest print since December 2018 5.1%.

Analysts said rising food and utility prices along with base effects likely caused inflation to continue to rise last month.

PNB Securities, Inc. chairman Manuel Antonio G. Lisbona said investors will also be watching the US Federal Reserve.

“The market will take a close look at any development related to the weakening US Fed stimulus as a factor in pulling money off the table in the coming sessions. This is due to the rise and persistence of inflation, which has thwarted the assertion of the US central bank that it is transitory, ”said Mr. Lisbona on Saturday in a separate Viber message.

“Although the Philippines has sufficient monetary leeway, the market will be affected in the short term by global market volatility,” he added.

“It looks like the market will trade between 6,780 and 6,980 with the midpoint as the initial support area,” Lisbona said. – KCG Valmonte

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