Low inflation, US debt deal to lift stocks

By Jenniffer B. Austria

SHARE prices are expected to get a boost from the progress of the US debt deal and the upcoming release of May inflation rate.

“The passing of the US debt ceiling bill may continue to give the local market an upward boost. Investors are also expected to take cues from our upcoming May inflation data,” Philstocks Financial Inc. research manager Japhet Tantiangco said over the weekend.

Tantiangco said the further slowdown in inflation which could lead to a possible interest rate cut in the coming

PSEi June 2, 2023

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months may support positive sentiment.

The Bangko Sentral ng Pilipinas said last week inflation likely eased further to as low as 5.8 percent in May from 6.6 percent in April following the rollback in petroleum prices and the reduction in poultry and fish prices.

Inflation reached a 14-year peak of 8.7 percent in January, before slowing down to 8.6 percent in February, 7.6 percent in March and 6.6 percent in April.

The BSP’s next policy meeting is on June 22.

Online brokerage firm 2TradeAsia. com said the local market remained on sideways movement amid thin trading last week despite recent positive developments.

“Generally the positive Q1 earnings report were not able to give the index enough escape to trade past the 6,700 level,” 2TradeAsia.com said.

Investors are expected to recalibrate their portfolio by focusing on stocks that would benefit from the slowdown in inflation rate.

The index is expected to trade between 6,400 and 6,600 levels this week. The bellwether Philippine Stock Exchange index closed lower by 18 points to 6,512 amid lackluster trading last week. Analysts said the market’s chart remained bearishly biased with the bourse posting losses for the second straight week.

Global stocks rallied Friday, closing out the week on a high in the United States following a bumper jobs report and a deal in Congress to avert a potentially catastrophic debt default.

The stronger-than-expected employment data released Friday morning suggests the US economy remains resilient despite concerted action from the Fed-

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Saudi Minister of Energy Prince

Abdulaziz bin Salman al-Saud arrives for the 186th Organization of Petroleum Exporting Countries meeting in Vienna on June 3, 2023. AFP