Higher inflation might lift PSEi
After last week’s redemption, traders will be on the lookout for the pivotal September inflation data and its impact on the Bangko Sentral ng Pilipinas’ policy meeting this week.
Should inflation fall within the lower end of the BSP’s projected range of 1.5 percent to 2.3 percent, the local bourse may be in for a climb, said Japhet Tantiangco. He is research head at Philstocks Financial Inc.
“A rate cut and/or signals of further policy easing in the near term are expected to help lift sentiment, too,” Tantiangco said over the weekend.
However, economists estimate that the inflation rate last month might have hit 2 percent on the back of recent storm damage and rice import freeze. That would be a seven-month high.
As a result, some are considering that the central bank might hit the pause button during its next rate-setting meeting on Oct. 9. Inflation data is set to be released on Tuesday, Oct. 7.
This comes after the benchmark Philippine Stock Exchange Index (PSEi) staged a 1.36-percent comeback from a six-month low last week. Cheap stock prices attracted investors.
The bourse was able to snap its seven-session losing streak in the middle of the week. It temporarily brushed aside negative sentiment over the government’s ongoing investigation on corruption behind controversial flood control projects.
Investors are likewise expected to take cues from other financial markets. Meanwhile, an improvement in the local currency could also provide some support, Tantiangco said.
He sees the index’s resistance at 6,150 and support at 6,000.
