Analyst: Upbeat data to spur Christmas rally
THE stock market could see the start of a holiday rally this week, analysts said, with the likely announcement of lower inflation complementing a stronger peso and crude price drops.
“The continuing drop in oil prices will tame inflation, [which] coupled with the strengthening of the currency will entice investors to get back into the market,” Eagle Equities Inc. research head Christopher Mangun said.
“With the current trajectory of the market it is possible that we will be seeing a Christmas rally this year,” he added.
Inflation figures for November are set to be released this Wednesday and the Bangko Sentral ng Pilipinas (BSP) expects an easing to 5.8-6.6 percent from a nine-year high of 6.7 percent.
“The deceleration of inflation for the month could be attributed to the sharp decline in petroleum prices, the normalization of supply conditions in rice and other agricultural commodities, and the peso appreciation,” the BSP said last week.
West Texas Intermediate fell by 1.01 percent on Friday to $50.93 per barrel while Brent was also down by 0.75 percent at $59.46 per barrel despite expectations that the Organization of Petroleum Exporting Counties and Russia would agree on cutting production by 1.3 million barrels a day.
Local oil firms, which have cut pump prices by nearly P10 per liter in recent weeks, are also expected to shave off another P2 this week.
The peso, meanwhile, strengthened by 13 centavos on Thursday to settle at P52.45:$1 from the previous day.
Financial markets were closed on Friday in observance of Bonifacio Day.
The Philippine Stock Exchange index closed the week by trading down 0.20 percent or 14.58 points to 7,367.85 on Thursday, while the wider All Shares dipped by 0.05 percent or 2.05 points to finish at 4,441.33.
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