7,000 a critical spot as inflation dogs PH stock investors

PSE headquarters in Taguig City —Contributed Photo

The benchmark Philippine Stock Exchange index (PSEi) will consolidate near the 7,000 level as investors await the release of new inflation data on Tuesday.

The PSEi ended a bumpy week lower by 0.35 percent to 7,027.38, underscoring concerns over the pace of economic recovery as consumer prices remain elevated.

Jonathan Ravelas, a veteran stock market analyst and financial strategy consultant at e-Methods for Business Management Corp., said downside risks would remain if the PSEi failed to hold 7,000.

“With the market’s failure to sustain itself above the 7,000 levels, expect more profit-taking. It may try to challenge the 6,500 levels,” he said on Friday.

The latest inflation print will be the primary focus during the Bangko Sentral ng Pilipinas’ (BSP) next interest-rate setting meeting on Feb. 16, according to BSP Governor Felipe Medalla.

Inflation was expected at 7.5 percent to 8.3 percent in January 2023, according to the central bank.

Meanwhile, key support zones for the PSEi were from 6,850 to 6,650 then 6,400 to 6,200, said Juanis Barredo, chief technical analyst at COL Financial Group Inc.

First Metro Investment Corp. and University of Asia and the Pacific said in the latest issue of The Market Call that the benchmark index could reach 7,500 within the year due to strong corporate earnings.

“Nonetheless, volatility will remain due to global uncertainties, particularly on inflation and interest rates, and so investors should still exercise selectivity,” it said.

—Miguel R. Camus INQ