PHILIPPINE SHARES may move sideways this week ahead of the release of July inflation data and more second quarter corporate earnings reports.

The benchmark Philippine Stock Exchange index (PSEi) ended its three-day rally on Friday, declining by 63.33 points or 0.99% to close at 6,315.93, while the broader all shares index went down by 26.14 points or 0.76% to 3,398.82.

Still, week on week, the PSEi went up by 52.54 points or 0.84% from its close of 6,263.39 on July 22.

“The local market fell this Friday by 0.99% to 6,315.93 as investors took profits from its preceding three-day rally. Worries over the negative spillovers of the US economy’s weakening on the Philippine economy weighed on sentiment,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

“Assuring statements from [Federal Reserve Chairman Jerome] Powell that the US economy is not in recession guided local gauges on the plus side, as latest Q2 US GDP (gross domestic product) data supported expectations for less aggressive consideration on sequel rate increases,” online brokerage said in a report.

For this week, Mr. Tantiangco said the market is expected to move sideways as investors wait for catalysts such as the July inflation data on Aug. 5, Friday.

“A slowdown from June’s 6.1% may spur positive sentiment, while a further acceleration may cause selling pressures in the local bourse,” Mr. Tantiangco said in a Viber message.

He added that investors are also expected to take cues from the release of more second quarter corporate earnings reports and foreign exchange trading.

“The peso is now back above the P56 per dollar level, closing at P55.13 last week. If its appreciation continues, then it may help spur optimism in the market,” Mr. Tantiangco added. said expectations of another rate hike in the Bangko Sentral ng Pilipinas’ meeting this month could also affect market sentiment.

“This would give enough reprieve for interest rate-sensitive sectors, especially those aiming for improved sales take-up for the remainder this year (i.e., property shares),” the online brokerage said.

Philstocks Financial’s Mr. Tantiangco trading could remain tepid amid the start of the “ghost month,” a period in the Lunar calendar when some Asian investors refrain from making big investments or decisions, resulting in lower trading volumes. For this year, the period started on July 29 and will run until Aug. 26.

He placed the PSEi’s immediate support at its 10-day and 20-day exponential moving averages of 6,282.48 and 6,292.59, respectively, and resistance at 6,350-6,400. Online brokerage put immediate support at 6,100-6,200 and resistance at 6,450-6,550. 

Meanwhile, Semirara Mining and Power Corp. (SCC) will join the 30-member PSEi starting Aug. 8, replacing Security Bank Corp. (SECB), after the PSE’s review for 2021, the bourse operator said on Friday.

This is the last index recomposition with a free float requirement of at least 15%, with firms now needing a public ownership level of 20% to qualify for inclusion in the PSEi in the next review period.

The PSE also announced changes in the composition of sectoral indices: Rizal Commercial Banking Corp. will now be part of the financials index; Benguet Corp. will be under mining and oil; 8990 Holdings, Inc. and DDMP REIT, Inc. will be in the property index; and Phinma Corp., Shakey’s Pizza Asia Ventures, Inc., and Synergy Grid & Development Phils., Inc. will be part of the industrial index.

The 20-member PSE MidCap and Dividend Yield indices will also be revamped, with SCC, Cebu Air, Inc., DoubleDragon Corp. and Filinvest Land, Inc. to be taken out of the MidCap index. They will be replaced by AyalaLand Logistics Holdings Corp., DDMP REIT, Inc. (DDMPR), SECB, and UnionBank of the Philippines, Inc.

Robinsons Land Corp., Robinsons Retail Holdings, Inc., SECB, and Universal Robina Corp. will also be removed from Dividend Yield Index to be replaced by DDMPR, Filinvest REIT Corp., MREIT, Inc. and RL Commercial REIT, Inc. — J.I.D. Tabile