Trading at the Philippine stock market is expected to remain volatile this week, as the massive sell-off in global shares last week and concerns on the domestic economy could force investors to stay on the sidelines.
Regina Capital Development Corp. managing director Luis Limlingan said investors were concerned when the Bangko Sentral and Pilipinas increased its inflation rate forecast in 2018 to 4.3 percent after January figures showed inflation rate hit a three-year high of 4 percent.
The Bankgo Sentral last week decided to keep interest rates at current levels, Limlingan expects the the central bank to start raising rates in March should inflation rate continue to go up in February.
“We expect support levels to be at 8,400. This is one of the strongest supports, but indicators show that this could get lower,” Limlingan said.
The PSEi last week suffered suffered a major correction, pluning by 3.5 percent to 8,503, while the broader All Shares Index tumbled 2.96 percent to P5,028.38 on the continued sell-off in global stocks.
All major sub-indices ended in the red, led by mining and oil which declined 5.45 percent, holding firms which lost 4.36 percent, property which decreased 4.25 percent, and industrial which fell 2.74 percent.
Last week’s decline wiped out the market’s gain since the start of the year, with the index now down 0.64 percent year-to-date.
Foreign investors were net sellers for the week by P4.69 billion, while average daily value traded stood at P8.74 billion.
Weekly top price gainers were Wilcon Depot Inc., which jumped 11.3 percent to P10.74; Bloomberry Resorts Corp., which advanced 9.5 percent to P13.26; and Del Monte Pacific Ltd. Inc., which rose 3.4 percent to P10.96.
Weekly top price losers were Cemex Holdings Philippines Inc., which dropped 8.7 percent to P4.08; Emperador Inc, which declined 4.7 percent to P7.50; and Globe Telecom Inc., which fell 6.5 percent to P1,775.
Wall Street stocks, meanwhile, ended a bruising week on a benign note courtesy of a late-session surge Friday, while equity markets in Europe and Asia fell sharply in volatile trading.
US stocks lurched back and forth in a roller-coaster session, opening decisively higher, then tumbling deep into the red at midday before rising again and finishing strong.
Europe’s key markets extended the recent days’ downturn to show substantial losses at the close following another spectacular drop in Asian shares.
The Dow Jones Industrial Average ended up 1.4 percent at 24,190.90 after swinging more than 1,000 points during the session.
In spite of the robust finish, the Dow’s weekly losses were the worst since January 2016 and investors are bracing for more turbulence ahead.
Paris, London and Frankfurt all lost more than one percent.
Asian trading floors were a sea of red, with concerns about tighter interest rates, particularly in the United States.
Hong Kong, Shanghai and Tokyo were among the worst hit as investors piled into haven assets such as gold and the yen. With AFP