The stock market is expected to continue with its sluggish trading this week as investor sentiment remains weak on health and growing inflation concerns.
Analysts said the 6,000-point support level could be tested over the near-term period, with foreign funds still lukewarm on the local equities market. The pandemic is restricting mobility, which in turn is preventing the further opening up of the domestic economy.
“The week’s close at 6,199.25 signals the market’s continued march towards the 6,000 levels is unfolding,” BDO Unibank Inc. chief investment strategist Jonathan Ravelas said.
“Should this decline accelerate in the coming days, it could put the 6,000 levels to the test and if it breaks, could put the 5,700 levels within striking distance,” he added.
Analysts said the market’s slide to the 6,000-point level could provide an opportunity for bargain hunters to accumulate on stocks that are expected to post significant rebound by the second half of the year.
The Philippine Stock Exchange Index last week slipped 1.1 percent to 6,199.25, while the broader All Shares Index dipped 0.2 percent to 3,842.72.
Four of the sectoral indices, however, posted week-on-week gains, led by mining and oil (+2.65 percent), property (+1.78 percent), services (+1.34 percent and industrial (+0.23 percent).
Holding firms fell 3.2 percent while the financials index declined 1.9 percent.
Foreign investors were net sellers for the week by P2.6 billion, while the average daily value traded dropped to P5.3 billion from the previous week’s average of P6.6 billion.
Weekly top price gainers were Ginebra San Miguel Inc., which jumped 19 percent to P71; PXP Energy Corp., which advanced 11.6 percent to P7.70; and Puregold Price Club Inc., which climbed 11.5 percent to P35.30.
Weekly top price losers were Megawide Construction Corp., which shed 8.3 percent to P6.05; SM Investments Corp., which dropped 5.5 percent to P910; and Universal Robina Corp., which fell 4.4 percent to P130.
Meanwhile, European equities advanced Friday following strong economic data, while US markets ended a volatile week on a muted note amid lingering inflation concerns.
Investor sentiment brightened after survey data showed eurozone business activity grew at its fastest rate in three years, as Europe’s economy emerges from months of COVID-19 restrictions.
IHS Markit’s Purchasing Managers’ Index (PMI) index of eurozone activity rose to a strong 56.9 in May from 53.8 in April, well above the 50-point level that indicates growth.
“Demand for goods and services is surging … as the region continues to reopen from COVID-related restrictions,” said Chris Williamson, chief business economist at IHS Markit.
“Growth would have been ‘even stronger’ had it not been for supply chain delays and difficulties restarting businesses quickly enough to meet demand,” he added.
Frankfurt stocks added 0.4 percent overall, and Paris won 0.7 percent as exchanges headed into the weekend.
London was flat however, as investors had already priced in an expected surge in British retail sales as the UK economy gradually emerges from a lockdown period. With AFP