STOCKS are expected to move sideways this week as ahead of the release of the country’s third-quarter gross domestic product (GDP) data and companies’ financial reports.

The 30-member Philippine Stock Exchange index (PSEi) rose 137.05 points or 1.90% to close at 7,340.77 on Friday, while the broader all shares index increased 53.84 points or 1.21% to end at 4,491.01.

Week on week, the benchmark PSEi inched up by 286.07 points from its 7,054.70 finish on Oct. 31.

Friday’s close was a “new high in nearly 11 months or since Jan. 11, 2021 and also well into pre-pandemic highs or since Feb. 21, 2020,” Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said in a Viber message.

“Market rally last week was due to the pleasant inflation surprise, lower than expected for the month of October, and the economy’s transition to Alert Level 2,” First Metro Investment Corp. (FMIC) Head of Research Cristina S. Ulang said.

Inflation eased to a three-month low in October amid a slower increase in food prices, the Philippine Statistics Authority (PSA) reported on Friday.

Headline inflation settled at 4.6%, slower than the 4.8% in September, but faster than 2.5% a year earlier. Still, this was the third straight month inflation exceeded the 2-4% target of the Bangko Sentral ng Pilipinas for the year.

This brought headline inflation for the first ten months to 4.5%, faster than the 4.4% forecast by the central bank for the year.

Meanwhile, National Capital Region is under the lower Alert Level 2 on Nov. 5 to 21.

Investors also cheered the “positive manufacturing report for the month of October” as the economy further reopened, Timson Securities, Inc. Trader Darren Blaine T. Pangan said.

The Philippines Manufacturing Purchasing Managers’ Index edged up to 51 last month from 50.9 in September, IHS Markit reported last week. A reading above 50 indicates improving conditions for the manufacturing sector versus the previous month, and below the threshold means deterioration.

For this week, “the market rally will extend and attempt a breakout above 7,400,” FMIC’s Ms. Ulang said.

“There could be bouts of profit taking but will be muted by resurgent corporate earnings growth as of (the ninth month of 2021),” she added.

“Investors may be looking forward to the country’s GDP report for the third quarter of the year” which will be released by the PSA on Tuesday, Timson Securities’ Mr. Pangan added.

RCBC’s Mr. Ricafort said other leads for the market are US Federal Reserve Chair Jerome H. Powell’s speech on Tuesday and the release of US inflation data on Wednesday.

The PSEi’s next resistance is at 7,400 to 7,500 “prior to further upside potential to new highs for 2021 as well as prior to new highs since the pandemic started last year,” he added, while immediate support is at 7,000. — B.A.D. Añago

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