SHARES may move sideways this week as the war between Russia and Ukraine continues to dampen investor sentiment and ahead of the release of March inflation data.

The benchmark Philippine Stock Exchange index (PSEi) fell by 50.59 points or 0.70% to close at 7,152.88 on Friday, while the broader all shares dropped by 23.24 points or 0.61% to 3,788.59.

Week on week, the PSEi gained 28.04 points from its finish of 7,124.84 on March 25.

China Bank Securities Corp. Research Director Rastine Mackie D. Mercado said the market may see a pullback following two weeks of slow ascent amid continued volatility due to the Russia-Ukraine crisis and ahead of the release of March inflation report.

“The index is likely to continue pulling back in the early part of [this] week as investors continue to take profit following gains made since March 21. A pullback to the 7,000 to 7,050 level is ideal as this solidifies the strength of the 7,000 support,” Mr. Mercado said in an e-mail.

“We may also see volatility inching higher as geopolitical developments remain fluid and as investors await March inflation data. An uptick after the pullback should be viewed as an opportunity for redeployment,” he added.

“Russia’s continued invasion and war with Ukraine [sent] oil, energy and other global commodity prices higher recently. That could still lead to higher inflation, petitions for transport fare hike, possible wage hike, risk of second-round inflation effects that could lead to tighter monetary policy and higher borrowing and financing costs for some listed companies,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message.

Ukraine’s troops have retaken more than 30 towns and villages around Kyiv, Ukrainian officials said on Saturday, claiming complete control of the capital region for the first time since Russia launched its invasion, Reuters reported.

After five weeks of fighting, Russia has pulled back forces that had threatened Kyiv from the north to regroup for battles in eastern Ukraine.

Meanwhile, the Philippine Statistics Authority will release March inflation data on Tuesday.

Analysts said headline inflation likely accelerated last month as the surge in global oil prices amid the Russia-Ukraine war caused faster increases in food and transport costs.

A BusinessWorld poll of 18 analysts yielded a median estimate of 4% for last month’s inflation, nearer the upper end of the central bank’s 3.3% to 4.1% projection.

If realized, this would be faster than the 3% in February and would match the upper end of the 2-4% target of the Bangko Sentral ng Pilipinas. Still, it would be slower than the 4.5% seen a year earlier.

For the coming week, Mr. Ricafort placed the PSEi’s immediate support at the 6,600 to 6,700 levels and resistance at the 7,200 level.

Meanwhile, China Bank Securities’ Mr. Mercado said in case the index climbs this week and breaks out of its 7,200 resistance, it could rally to the 7,500 level. — Luisa Maria Jacinta C. Jocson with Reuters

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