Share prices are expected to move sideways this week as investors await the result of the US Federal Reserve meeting scheduled this Wednesday.
Analysts said the market was expecting the US Fed to reduce the benchmark interest rates by 25 basis points and that a decision to defer a rate cut could spook the market.
“With the index managing to hold up above its 20-day moving average support at 8,170, possibility for it to go back to its highs at 8,400 still remains alive. Catalyst to watch for next week should be the Fed’s meeting where they’re expected to cut by 25 basis points,” said Gabriel Jose Perez, a trader of Papa Securities Corp..
Investors will also monitor the second quarter earnings results of listed companies.
Among the companies scheduled to release second-quarter results this week are Aboitiz Equity Ventures Inc., Aboitiz Power Corp., Metro Pacific Investments Corp. and Philex Mining Corp.
Online brokerage firm 2TradeAsia.com said any indicative trend of stronger quarter-on-quarter results would support the case for improved valuations on target prices.
The Philippine Stock Exchange Index last week declined 1 percent to 8,183.99, while the broader All Shares Index dipped 1.1 percent to 4,955.60.
Except for the holding firms which climbed by 0.7 percent, all sub-indices posted week-on-week declines, led by mining and oil, which fell 3.1 percent; industrial, which dropped 2 percent; and services which decreased 1.8 percent. The property index lost 1.7 percent, while financials fell 1.5 percent.
Foreign investors were net sellers during week by just P18 million, while the average daily value traded stood at P6.6 billion from previous week’s average of P7.3 billion.
Weekly top price gainers were Wilcon Depot Inc., which rose 5.3 percent to P15.94; Ayala Corp., which advanced 3.4 percent to P983; and Universal Robina Corp., which gained 3 percent to P171.
Fast-food giant Jollibee Foods Corp. was one of the weekly top losers for the week, slumping 9.9 percent to P252 after the company reported it was acquiring The Coffee Bean & Tea Leaf, a specialty coffee and tea brand based in Los Angeles, California, USA for $350 million.
Other top losers during the week were Philex Mining Corp., which dropped 8.3 percent to P3.44; and ISM Communications Corp., fell 5.4 percent to P5.45.
Meanwhile, stock markets in Europe and the United States pushed higher on Friday, with Wall Street indices scoring fresh records, as investors remained confident about the prospect of interest rate cuts.
In Europe, investors focused on the likelihood the European Central Bank will move forward with measures to boost the economy at its next meeting in September, despite the fact that in his comments on Thursday ECB chief Mario Draghi was less dovish—or open to an easing of monetary policy—than expected.
“The prospect of a rate cut in September is still on the table and traders are snapping up relatively cheap stocks,” said CMC Markets analyst David Madden.
“Yesterday acted as a speed bump and today dealers are reshaping their outlook, which remains broadly positive,” he added. With AFP