November 21, 2017 | MANILA, PHILIPPINES

Stocks to get boost from bullish bets on PHL data

THE MARKET may return to the 7,700 level to start the month amid investors’ bullish bets on local economic data.

The bellwether Philippine Stock Exchange index (PSEi) closed April at 7,661.01 after ending above the 7,700 line twice last week amid easing tensions from the initial results of the French presidential election.

For this week, analysts are looking at local leads to lift the market anew.

“The PSEi will try to retest previous year-to-date highs by reattempting to break through the 7,700 level. First quarter earnings will continue to trickle in while key data such as inflation and GDP (gross domestic product) will drive investors to take positions,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said.

The Philippine Statistics Authority will releasing April inflation data on Friday. A BusinessWorld poll of 13 economists late last week yielded a median 3.5% inflation forecast for the month, which if realized will pick up from a 3.4% rate logged in March and would soar from a 1.1% reading from a year ago.

The estimate also falls close to the midpoint of the 3-3.8% forecast range given by Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. last week, and logs closer to the high end of the government’s 2-4% target band.

Meanwhile, official first quarter GDP data is set for release on May 18. Mr. Limlingan said “there will be some speculation” on the country’s economic growth report as early as this week, which may boost sentiment.

The market will also look to the US Federal Open Market Committee’s May 2-3 policy meeting, where Fed Chair Janet L. Yellen is expected to drop hints about the US central bank’s future interest rate hikes.

Investors may also be taking positions based on the second round of the French presidential elections is set on May 7, analysts said.

A failure to sustain the rally will bring the main index back to the 7,500 to 7,600 level, Mr. Limlingan noted.

Asian stocks shook off a sluggish start and edged up on Monday, with Japan outperforming on upbeat earnings, while the dollar regained traction as the US government looked likely to avoid a shutdown.

MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.1%. Japan’s Nikkei 225 climbed 0.4%, with high-tech blue chips gaining on strong earnings.

Asian shares initially took their cue from Wall Street, which dipped on Friday after data showed the US economy grew at its weakest pace in three years in the first quarter.

The mood brightened slightly, however, on news that US congressional negotiators hammered out a bipartisan agreement on a spending package to keep the federal government funded through Sept. 30, thus averting a government shutdown. Overall reaction was still limited as many markets in Asia and Europe were closed for Labor Day. -- ABF with Reuters