Key economic data in focus as market seeks leads

BARGAIN HUNTERS could help lift Philippine stocks this week, with the release of key economic data, including reports on October inflation and third-quarter gross domestic product (GDP), to drive trading.

On Oct. 30, the benchmark Philippine Stock Exchange index (PSEi) went down by 0.57% or 34.09 points to close at 5,929.68, while the broader all shares index fell by 0.33% or 11.93 points to end at 3,593.28. Philippine financial markets were closed on Oct. 31 for a holiday.

Week on week, the PSEi dropped by 58.34 points from its close of 5,988.02 on Oct. 24.

The bellwether index was also down for the month, dropping by 23.78 points from its 5,953.46 finish on Sept. 30.

“The numbers show that the local market has been bearish for October,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message. “Trading has been tepid, with net value turnover averaging P4.90 billion per day for the month, lower than the year-to-date average of P5.85 billion. Foreigners have been net sellers for the month, with net outflows amounting to P5.85 billion.”

“This can be attributed primarily to the negative investor sentiment brought by the infrastructure related corruption issues in the Philippines and their impact on the country’s economic outlook. The peso’s decline against the US dollar also added to the market’s poor October performance,” he said.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan said the market showed “some resilience” despite volatile trading last month, mainly backed by strong corporate results.

“Power and mining sectors stood out, with some notable stocks gaining traction due to recent earnings reports and project developments amidst tariff hikes and trade disruptions. Property sectors have seen some progress on the residential, retail and leasing front, as well as gradual recovery in international tourism rates,” he said in a Viber message.

For this week, Mr. Tantiangco said bargain hunting following the market’s two-week decline could lift the PSEi.

“For the market’s general direction, however, we expect investors to take cues from our upcoming macroeconomic data. Investors are expected to look towards our Q3 GDP data to know how the local economy has been. A growth slower than the government’s 5.5%-6.5% target for the year may weigh on the market,” he said.

He added that data on inflation and manufacturing activity, along with the peso’s movements against the dollar, could also provide some leads.

“Bearish sentiment continues to dominate the local market as downside risks continue to press on while positive catalysts are yet to be seen. Investor confidence remains weak.”

Mr. Tantiangco put the PSEi’s major support at 5,800 and major resistance at 6,000.

Meanwhile, Mr. Limlingan said the release of more listed companies’ financial results could also provide catalysts. — Alexandria Grace C. Magno