Stock market trading may see continued sideways movement in the last trading week of 2022 as expectations of further interest rate hikes may temper the seasonal year-end “window dressing”, analysts said over the weekend.
Analysts said the economic headwinds next year such as elevated interest and inflation rates which could slow down the growth of the global economy are among the lingering concerns among investors.
Luis Limlingan, managing director at Regina Capital Development Corp., said investors were worried that over-tightening by central banks worldwide could force economies into a downturn.
The US Federal Reserve raised borrowing costs by 425 basis points since March, while the Bangko Sentral ng Pilipinas adjusted its rates by 350 bps since May.
The Fed and the BSP are expected to continue raising interest rates next year to curb inflation.
Bargain hunting may also take place in the last trading week because of the traditional year-end window dressing as the accounting year comes to an end.
Online brokerage firm 2TradeAsia.com said it expected the 30-company Philippine Stock Exchange index to retest the 6,600 and 6,800 levels this week as domestic growth stories remained intact.
The bellwether inched up by 0.7 percent last week to close at 6,541.03 on Dec. 23, while the broader all-share index climbed 0.95 to 3,432.47.
Global stocks were mixed at the end of a meandering session Friday, characterized by light pre-Christmas trading volumes as oil prices were jolted higher by a Russian threat to curtail production.
After opening in the red, US indices bounced back and finished moderately higher following mixed economic data, while the US Congress reached final passage of a $1.7 trillion package to keep the government running.
“Ultimately, a late afternoon push higher left the main indices near their best level of the session, albeit with slim gains, to close out the first day of the so-called Santa Claus rally period,” said Briefing.com.
The broad-based S&P 500 finished up 0.6 percent for the day, but with a narrow loss for the week. With AFP