Volatile trading at the stock market will continue this week as the Russia-Ukraine war drags on and push up local pump prices.
Analysts said the risk off sentiment will continue to dictate the market’s movement amid the geopolitical tension and fears of a possible hike in inflation and interest rates.
Online brokerage firm 2TradeAsia.com said the market should brace for the result of the Federal Open Market Committee regular policy meeting scheduled this week.
Analysts are expecting the Federal Reserve to announce its first interest rate increase in years in a bid to curb inflation.
“While there was a technical comeback later in the week to out the index at a safe range above 7,000, brace for the full reaction to the Fed’s expected move next week, even if some anxieties have been baked in earlier this year,” 2TradeAsia.com said.
“The silver lining during any crisis, as the pandemic taught us in 2020, is that broad based meltdowns provide openings to accumulate companies of real value at a discount,” it added.
The Philippine Stock Exchange Index last week slumped 3.1 percent to 7,112.19 on worries about the impact of the steep rise in fuel prices on economic growth.
All sub-indices ended in red led by industrial which dropped 4.8 percent; holding firms which declined 3.6 percent; property which fell 3.50 percent; mining and oil which sank 3.5 percent; financials which decreased 2.6 percent; and services which lost 2.3 percent.
Weekly top price gainers were Ginebra San Miguel Inc. which climbed 2.2 percent to P113.50; Aboitiz Power Corp., which rose 1.9 percent to P34.90; and AC Energy Corp., which climbed 1.8 percent to P8.28.
Weekly top price losers were Emperador Inc., which plunged 23.5 percent to P14; Universal Robina Corp., which dropped 10 percent to P107.70; and Cebu Air Inc., which lost 8.9 percent to P43.20.
Wall Street, meanwhile, ended a downbeat week with further losses Friday as traders braced for continued economic fallout from Russia’s invasion of Ukraine as well as looming Federal Reserve rate hikes, though European indices saw gains.
Oil also rose on Iran supply fears, but remained well below the 14-year peak of near $140 hit Monday brought on by worries of disruptions to supply from Russia, a major producer.
The pound and yen hit multi-year dollar lows before regaining some ground, as traders prepared for the Federal Reserve to most likely hike interest rates this week for the first time since the pandemic, in the first of several moves this year to fight inflation.
While equities rose after Putin said his negotiators had reported “certain positive shifts” in talks with Ukraine, the enthusiasm petered out in New York trading as Washington and Brussels announced new sanctions against Russia and fighting continued.
The Nasdaq closed more than two percent lower and the S&P 500 fell more than one percent.
“This gullible market—or some indubitable algorithms—seems willing to take Putin’s words as the makings perhaps of an exit path,” said Briefing.com analyst Patrick O’Hare.
In Europe, London ended with a gain of 0.8 percent, Paris rose by 0.9 percent and Frankfurt climbed 1.4 percent to post their first weekly rise since the war. With AFP