PSEi braces for fresh inflation cues
The Philippine stock market might remain volatile in the week ahead as investors continue to monitor developments in the United States-Iran conflict, while awaiting key economic data that could shape expectations for inflation and monetary policy.
Analysts from Philstocks Financial Inc. and brokerage firm 2TradeAsia said geopolitical risks remain the dominant market driver after the benchmark Philippine Stock Exchange Index (PSEi) slipped below the key 5,800 level last week.
From a technical standpoint, Philstocks research manager Japhet Tantiangco said the PSEi’s break below 5,800 will be closely watched this week. A recovery above that level could place the market within a 5,800-to-6,000 trading range.
Failure to regain the threshold may expose the index to a decline toward the next support level at 5,600.
The market is digesting weaker-than-expected first-quarter corporate earnings, which reflected the slowdown in economic growth and raised concerns that listed firms may face a more challenging second quarter as the Middle East conflict continues to weigh on economic activity.
“Moving forward, the local market is expected to continue taking cues from the developments between the US and Iran,” Tantiangco said.
Investors are likewise expected to watch the release of May inflation data on June 5, which could provide fresh signals on household consumption and the Bangko Sentral ng Pilipinas’ (BSP) next policy moves.
Tantiangco said an inflation print that remains elevated, particularly if it exceeds April’s 7.2 percent, could dampen sentiment. On the other hand, easing inflation may support expectations of a more accommodative monetary stance.
2TradeAsia also flagged inflation as a major concern, saying the BSP could be forced into a more defensive position if price pressures remain persistent.
