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Thursday, March 28, 2024

Stock market investors cautious

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Share prices are expected to move sideways this week as investors turned pessimistic on renewed concerns on a possible global economic slowdown.

Online brokerage firm 2TradeAsia.com said cautious trading would seep in for now as the market looked for firmer direction pending economic policies.

“Fund managers are seen to assess variables that would support the global macro outlook this year, and how locally listed companies will position relative to their capex and operations-related strategies,” 2TradeAsia.com said.

“This would likely keep gauges at bay for now, as investors retool their respective trading calls and review these on a quarterly perspective,” it added.

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BDO Unibank Inc chief investment strategist Jonathan Ravelas noted that the market was struggling to stay above the 8,000-point level because of negative developments overseas, including the US-China trade row. 

“With the week’s close below the 8,000 levels, expect a possible test towards the 7,800/7,850 levels,” Ravelas said.

The Philippine Stock Exchange Index last week fell 2 percent to 7,908.89 points, while the broader All Shares Index dipped 1.5 percent to 4,823.32.

Except for property firms which rose 1 percent, all major sub-indices posted week-on-week decline led by financials (-3.3 percent), services (-3.14 percent), mining and oil (-2.8 percent), industrial (-1.9 percent) and holding firms (-1.6 percent).

Foreign investors were net sellers during the week by P141.6 million, while the average daily value traded amounted to P8.4 billion from the previous week’s average of P7.4 billion.

Weekly top price gainers were Vista Land & Lifescapes Inc., which jumped 23 percent to P8, 8990 Holdings which climbed 16.3 percent to P11.96 and Bloomberry Resorts Corp., which rose 7.8 percent to P13.

Weekly top price losers were Roxas Holdings Inc., which declined 13.4 percent to P14, PH Resorts Group Holdings Inc., which dropped 12.9 percent to P5.40 and PLDT Inc., which fell 10.3 percent to P1,112.

European and US stock markets, meanwhile, leapt on Friday as positive signs emerged from US-China trade talks aimed at averting an escalation of a tariff war between the world’s top two economies.

US President Donald Trump said the negotiations in Beijing were going “extremely well” and his Chinese counterpart Xi Jinping announced the talks would continue in Washington next week.

Trump also said there was a “possibility” he would extend a March 1 deadline for a sharp rise in tariffs on $200 billion Chinese goods to go into effect.

The Dow Jones Industrial Average index finished the day up 1.7 percent to 25,883.25 to close its eighth straight week of gains.

“There is a lot of optimism that a deal will be done,” said Bill Lynch on Hinsdale Associates. “I’ll believe it when I see it but it seems that a deal is fairly close.”

Investors also greeted Trump’s decision to sign a spending bill that averts another government shutdown.

Meanwhile, Trump’s decision to declare a national emergency to fund a wall along the Mexican border, which is expected to face legal challenges, is a “side issue,” Lynch said. With AFP

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