Stocks are expected to move sideways this week, ahead of the US Federal Reserve’s meeting which may lead to a new interest rate hike in the world’s largest economy.
Fed Chair Janet Yellen signaled the US central bank would raise the rates this month, once employment and other economic data held up. The Fed will meet March 14 and 15.
“Attention will revert to the Federal Open Market Committee Meeting this week, even as fund managers have seemingly priced-in the possibility of three quarters of rate hike. What should be underscored, is the extent at which FOMC officials will acknowledge the pace of US economic growth, starting with labor data expansion,” F. Yap Securities said.
The brokerage firm said with the upcoming rate hike in the US, investors would also track local monetary authorities’ revised stance on borrowing costs and its effect on listed companies’ earnings growth.
Analysts said the big drop in the stock market last week could open buying opportunities for bargain hunters, particularly on stocks that were expected to sustain growth amid current economic conditions.
The 30-company Philippine Stock Exchange index dropped 1.4 percent last week to close at 7,146.27 on March 10, while the all-share index declined 1 percent to 4,343.39, as investors took caution amid the certainty of an interest rate hike from the Fed.
Except for the financials and services, all other sub-indices ended in the red, led by holding firms which plunged 3.5 percent, industrials which ended down by 1.7 percent, property which dipped 0.3 percent and mining and oil which dropped 0.02 percent.
Foreign investors were net sellers by P57 million last week, while the average daily turnover jumped to P7.4 billion from the previous week’s average of P5.5 billion.
Top gainers were PLDT Inc. which climbed 6.1 percent to P1,535, First Gen Corp. which advanced 4.87 percent to P22.30 and Globe Telecom Inc. which climbed 4.1 percent to P1,910.
Heavy losers included SM Investments Corp. which fell 8.7 percent to P599, Emperador Inc. which dropped 8 percent to P6.35 and Metropolitan Bank & Trust Co. which retreated 5.4 percent to P77.05.
SM Investments Corp. was the biggest loser on Friday after its shares fell 9.2 percent on last minute selling.