Market consolidation to continue

Local stocks are expected to continue trading sideways this week with a slight downward bias as renewed concerns over the US-China trade war and anemic earnings results could dampen investor sentiment.

BDO Unibank Inc. chief investment strategist Jonathan Ravelas said the market would continue with its base-building consolidation as it gathered steam to try the 8,500-point levels in the near-term. 

While the Philippine Stock Exchange Index managed to rebound and stay above the 8,000-point level, Papa Securities trader Gabriel Jose Perez said negative sentiments due to developments overseas could still hamper market sentiment.

“Might be too soon to say that the index is out of the woods despite it being bought up at the close. Continue to monitor US markets for further developments as this could dictate regional market movement in the coming days,” said Perez.

Investors are expected to monitor second-quarter earnings of listed companies after initial reports showed weak results.

Among the companies scheduled to release second-quarter results this week are Ayala Land Inc., SM Investments Corp., Globe Telecom Inc., San Miguel Corp. and Petron Corp.

The PSEi last week lost 0.67 percent to 8,129.93, while the broader All Shares Index dropped 0.6 percent to 4,926,56 as the trade war between the US and China escalated further. 

Four of the six sectoral indices ended in the red, led by services (-2.35 percent), holding firms (-1.22 percent), property (-0.53 percent) and industrial (-0.48 percent).

The mining and oil index rose 2.9 percent while the financials added 0.7 percent.

Foreign investors were still net buyers during the week by P292.8 million, while the average daily value traded stood at P6.3 billion from the previous week’s P6.6 billion.

Weekly top price gainers were Philex Mining Corp., which rose 13.4 percent to P3.90; Rizal Commercial Banking Corp., which climbed 6.7 percent to P30.40; and JG Summit Holdings Inc. which advanced 4.9 percent to P69.50.

Weekly top price losers were Globe Telecom, which declined 5.4 percent to P2,100; Aboitiz Power Corp., which dipped 5 percent to P34.80; and Robinsons Land Corp. which lost five percent to P26.60.

Equity trading screens, meanwhile, were bathed in red on Friday after US President Donald Trump stunned investors by unveiling new tariffs on China, cranking up trade tensions between the world’s top two economies.

The announcement on Thursday that Washington will impose 10 percent tariffs on another $300 billion in Chinese goods sparked a broad-based sell-off across the globe.

All three major Wall Street indices sank to their lowest levels since June, with the S&P 500 and Nasdaq recording their worst weekly losses of 2019.

News that demand for US exports had weakened underscored concern that trade was becoming a trouble spot for economies worldwide.

Trump’s announcement means virtually all of the $660 billion in annual merchandise trade between the world’s two biggest economies will be subject to punitive tariffs on it, with the latest duties due to take effect September 1. With AFP

Topics: Stock Market , Philippine Stock Exchange Index , Philippine Stock Exchange , PSE , PSEi
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