Trading at the Philippine Stock Exchange is expected to remain volatile this week as investors weigh the inflation risks caused by the Russia-Ukraine war and the recent move of the US Federal Reserve to raise interest rates.
The US Fed last week increased interest rates by 25 basis points and penciled six more rate hikes this year to curb rising inflation.
The Bangko Sentral ng Pilipinas, however, assured the market its policy rates would remain data driven, and not dependent on the action of the US Federal Reserve.
Investors will also monitor other local developments, including the depreciation of the peso against the dollar, earnings report of listed companies and the upcoming presidential elections.
“Trade within range and take heed of possible supply pressure on rallies,” online brokerage firm 2TradeAsia.com said. It placed the immediate support level at 7,000 points and the resistance at 7,200-7,250.
The bellwether Philippine Stock Exchange Index last week slipped 1.5 percent to 7,007.63 amid volatile trading due to external factors.
The All shares index dropped 1.3 percent while all major sub-indices ended on the negative.
The services index sank 3.4 percent; mining and oil was lower by 2.1 percent; industries declined by 1.5 percent, holding firms fell 1.4 percent; financials dipped 0.6 percent; and property decreased 0.4 percent.
Foreign investors were net sellers for the week by P5 billion, while the average daily value traded rose to P12.65 billion from the previous week’s average of P9.47 billion.
Weekly top price gainers were San Miguel Corp., which advanced 5 percent to P108.10; Metro Pacific Investments Corp., which rose 4.7 percent to P3.77; and Manila Water Co. Inc., which climbed 3.4 percent to P20.05.
Weekly top price losers include PLDT Inc., which dropped 7.8 percent to P1,686; Aboitiz Equity Ventures Inc., which declined 6.9 percent to P56.75; and PXP Energy Corp., which fell 6.3 percent to P5.68.
Meanwhile, oil prices rose while most leading global stock markets also climbed to conclude a positive week for equities despite the growing toll of Russia’s attack on Ukraine and central bank moves to counter inflation.
After trading in negative territory most of the day, European stock markets turned higher at the close, shrugging off concerns about aggressive monetary tightening by different central banks around the world, sky-high inflation and soaring commodity prices.
Wall Street stocks also began the day in the red, but quickly turned positive and finished solidly higher. The broad-based S&P 500 finished up 1.2 percent for the day and more than six percent for the week.
Analysts say the surge on Wall Street reflected bargain hunting after a grim start to the week.
“No one is going to step in front of the train,” Briefing.com analyst Patrick O’Hare said.
“It’s undeniably a really good week,” he said, adding that he nonetheless expects more volatility ahead.
But OANDA analyst Craig Erlam suggested that “an unhealthy amount of complacency (could be) creeping into the markets.” With AFP