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Friday, March 29, 2024

Stock market investors cautious

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Share prices are expected to continue with their sideways trading this week as investors remain cautious on uncertainties in the global economy amid the US-China trade war.

Analysts said investor sentiments were also dampened by the Duterte administration’s move to reduce the growth of the gross domestic product to 6 percent to 7 percent from 7 percent eight percent due to constraints from the delayed enactment of the 2019 national budget.

But with the expected status quo on the the US Fed rate, analysts are expecting foreign funds to continue to flow in emerging markets, including the Philippines.

The US Federal Reserve Open Market Committee is scheduled to meet on March 19 to 20, followed by Bangko Sentral ng Pilipinas’ Monetary Board meeting on March 21.

There is virtually no chance the US Federal Reserve will raise interest rates in the coming week, since policymakers have all but promised to hold their fire as the global economy slows.

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“The likelihood for a status quo on the Fed rate is gaining ground, especially with the recent weakness in select key spending data in the US,” online brokerage firm 2TradeAsia said.

“At home, several players are starting to price in a cut in reserve requirement form the new BSP chief, a move that should help induce lending to support capital rollout,” it added.

The Philippine Stock Exchange Index last week closed flat at 7,798.28 points, saved by last-minute bargain hunting and portfolio adjustments after a rebalancing of the  Financial Times Stock Exchange.

The six sectoral indices also ended mixed, with financials, property and services posting week-on-week gains while mining and oil, holding companies and industrial registering week-on-week declines.

Foreign investors were net buyers by P1.4 billion, while the average daily value traded jumped to P8.5 billon from last week’s average of P5.9 billion.

Weekly top price gainers were DM Wenceslao & Associates Inc., which rose 10 percent to P10.96; PLDT Inc., which advanced by 8 percent to P1,161; and DMCI Holdings Inc., which gained 7.3 percent to P12.40.

Weekly top price losers were JG Summit Holdings Inc., which declined 8.8 percent to P61.05; First Gen Corp., which dropped 7.5 percent to P20.50; and Nickel Asia Corp., which dipped 7.3 percent to P2.53.

Stock markets rose across the globe on Friday, lifted by the latest encouraging reports from the US-China trade talks while the pound ended a volatile Brexit-fueled week on a strong note.

China’s official Xinhua news agency reported “substantial progress” had occurred in a call that Beijing’s trade enjoy Liu He held with US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin.

That added to a positive tone struck Thursday by US President Donald Trump.

“Comments coming from the Chinese side were positive. That helped despite the fact the US president suggested he could walk away from a deal this week,” Quincy Krosby of Prudential Financial told AFP.

On Wall Street, the major indices closed with gains for the week, as the S&P 500 and Nasdaq hit their highest levels since early October. With AFP

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