Stocks are expected to trade sideways this week, on increased volatility due to negative developments in Europe and concerns over China.
BPI Asset Management said in its weekly review the release of inflation data in the US this week could influence the direction of the local market.
“Low inflation would result in positive sentiment in the [local] equities market as it could indicate a delayed normalization of Fed rates,” BPI Asset Management said.
A higher inflation rate could further spur foreign selling in the Philippines, as institutional players might secure positions in stocks with positive correlation with US interest rates, such as treasuries.
“We expect the local equities market to trade range-bound from 7,780 to 8,000. Continued net foreign outflows as seen this week will drag the index down,” BPI Asset Management said.
BDO Unibank chief investment strategist Jonathan Ravelas said the market still had some energy to retry the 8,000 to 8,130-point level, if the 7,850 support level held.
The PSEi last week dropped 2.2 percent to close at 7,946.89 while the all-shares index jumped 2.1 percent to 4,536.86.
All major sub-indices ended in the red, led by mining and oil (-6.88 percent), property (-2.65 percent), holding firms (-2.3 percent) and services (-2.03 percent).
Foreign investors were net sellers last week by P5.57 billion, as total foreign selling hit P30.02 billion while foreign buying amounted to P24.65 billion.
Average daily turnover, however, increased to P15.2 billion from previous week’s average of 8.9 billion.
Top gainers last week were mostly third-liners led by Makati Finance Corp. which closed higher by 26.8 percent P6.90; Imperial Resources Inc. “B” shares, which increased 25 percent to P30; and MJC Investments Corp., which rose 13.3 percent to P3.40.
Heavy losers were Mabuhay Vinyl Corp., which fell 29.6 percent to P2.54; Federal Resources Investments Corp., which dropped 18.9 percent to P18.96’ and Pryce Corp., which went down by 17.4 percent to P2.60.