PHILIPPINE SHARES are expected to decline this week as economic data fueled expectations of more rate hikes from both the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP).

The Philippine Stock Exchange index (PSEi) inched down by 2.08 points or 0.03% to close at 5,932.19 on Friday, while the broader all shares went up by 0.80 point or 0.02% to 3,200.59.

Week on week, the PSEi gained 191.12 points or 3.33% from its close of 5,741.07 on Sept. 30.

“The market took a breather from last week’s rout, as bargain hunters came alive ahead of September 2022 earnings season,” online brokerage said in a report on Friday.

AB Capital Securities, Inc. Vice-President Jovis L. Vistan in a Viber message said that the market moved sideways on Friday as investors stayed on the sidelines ahead of the release of the latest US jobs data that night.

Nonfarm payrolls increased by 263,000 jobs last month after rising by an unrevised 315,000 in August, the US Labor department reported on Friday.

China Bank Securities Corp. Research Director Rastine Mackie D. Mercado said the jobs report may cause the market to decline this week “as this further cements prospects of continued aggressive rate hikes from the Fed.”

“Worries over further rate hikes by the Fed could be strong this week following the US’ strong September labor market data. Investors may also look towards our balance of trade and foreign investment data for cues,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message. 

“Lingering concerns from the peso’s weakness to inflationary risks in the Philippines, to the hawkish monetary policy outlooks of the Federal Reserve and the Bangko Sentral ng Pilipinas may weigh on sentiment,” Mr. Tantiangco added.

Philippine headline inflation rate rose to an over 13-year high of 6.9% in September from 6.3% in August and 4.2% in the same month last year, fueling expectations that the BSP will continue to hike rates.

The Monetary Board has raised borrowing costs by 225 bps since May. Its next policy-setting review will be on Nov. 17.

Meanwhile, the US central bank has hiked rates by 300 bps since March, with policy makers saying there may be a need to continue tightening aggressively as inflation remains stubbornly high.

The release of latest US consumer price index (CPI) data will also drive trading this week, Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message. September US CPI data will be released on Oct. 13.

Philstocks Financial’s Mr. Tantiangco and 2TradeAsia. com put the PSEi’s support at 5,700 and resistance at 6,000-6,100; China Bank Securities’ Mr. Mercado placed support at 5,830 and resistance at 6,050-6,200. — A.E.O. Jose