Stock index seen testing 7,500 support level

The local stock barometer is seen testing the 7,500 support level this week as geopolitical jitters aggravate local concerns on inflation and interest rates.

Last week, the Philippine Stock Exchange index (PSEi) slipped for the third consecutive week, losing 17.25 points or 0.2 percent to close on Friday at 7,630.26.

BDO Unibank chief strategist Jonathan Ravelas said geopolitical concerns led by Italy’s political crisis and US President Donald Trump’s trade war “added more headwind for local investors who are already rattled by rising inflation and rising interest rates.”

The PSEi hit a new year-low of 7,457.05 last week.

“The week’s close at 7,630.26 continues to suggest further tests toward the 7,000 to 7,200 support range into play. Any pullback (if any) is limited toward the 7,500 to 7,800 levels,” Ravelas said.

Gio Perez, analyst at Papa Securities, said the market was now looking forward to the release tomorrow of the inflation rate data for May. The latest inflation number, he said, could influence the Bangko Sentral ng Pilipinas’ (BSP) decision during its monetary setting on June 21.