PSEi outlook mixed as inflation cools

Investors may continue to tread carefully this week as easing inflation offers some relief, but concerns over interest rates and global uncertainties could keep market sentiment fragile, according to brokerage firm 2TradeAsia.

For the shortened trading week, 2TradeAsia expects volatility to remain driven by interest rate developments and climate-related concerns. It identified immediate support for the Philippine Stock Exchange Index (PSEi) at 5,800 and resistance at 6,050, with a secondary resistance level at 6,300.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said investors still continue to monitor developments in the Middle East, with hopes for a US-Iran agreement tempered by reports that negotiations have stalled.

Philstocks Financial research manager Japhet Tantiangco said investors would also watch the release of the Philippine Statistics Authority’s April Labor Force Survey on June 9 and the Bangko Sentral ng Pilipinas’ March foreign direct investment data on June 10 for fresh clues on the economy’s health.

Brokerage 2TradeAsia said the benchmark PSEi entered June with mixed signals after gaining 169 points, or 2.94 percent week-on-week, to close at 5,938.38.

The advance came as investors accumulated oversold stocks following a softer-than-expected May inflation print.

See Also

BIZ BUZZ: Vincent Co answers call of harried Pinoys

The brokerage noted that inflation slowed to 6.8 percent in May from 7.2 percent in April, helping fuel gains in consumer-related counters.

However, 2TradeAsia cautioned that the market remains caught between competing forces, particularly uncertainty over the future direction of monetary policy in both the Philippines and the United States.