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Philippines
Thursday, March 28, 2024

Flat trading seen; traders cautious

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Share prices are expected to continue their sideways movement as investors remain cautious about rising interest rates and higher inflation rate.

Analysts said range-trading was likely this week until the US Fed Board provided a firm indication on a possible interest rate hike.

The timing of the rate increase from the Fed might continue to highlight this week’s trading, especially with the mixed signals between January’s and retail sales,” F. Yap Securities said.

“Our take is that more time will be needed for other confirmatory signals before the Fed committee considers tightening its policies,” it added.

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BDO Unibank chief investment strategist Jonathan Ravelas said investors remained cautious and not comfortable yet with the higher interest rates. 

“Chartwise, the week’s close at 8,612.44 suggests the market to range between the 8,350–8,700 levels in the near-term. Immediate support and resistance is seen at 8,350 and 8,800 levels, respectively,” Ravelas said.

Traders also expected a thin trading volume this week ahead of China market’s weeklong celebration of the Lunar New Year.

The Philippine Stock Exchange Index, after three weeks of decline, advanced 1.3 percent last week to close at 8,612.44, while the broader All Shares Index climbed 0.9 percent to 5.075.60.

Except for he industrial index, which dropped 1.45 percent, all sub-indices ended in green led by mining and oil (+2.47 percent), holding firms (+2.11 percent), and property (+1.60 percent).

Foreign investors were net sellers by P3.2 billion, while the average daily value traded stood at P8.2 billion.

The weekly top price gainers were Bloomberry Resorts Corp., which rose 5.5 percent to P12; Security Bank Corp., which gained 5.3 percent to P258; and Aboitiz Equity Ventures Inc., which gained 5.2 percent to P75.

The weekly top price losers were East West Banking Corp., which declined 8.9 percent to P26.95; 2Go Group Inc., which fell 6.3 percent to P17.70; and Alliance Global Group Inc., which lost 5.9 percent to P14.34.

Meanwhile, global stocks mostly rose Friday as investors continued to ramp up purchases as equities have stabilized following a bout of volatility earlier in the month.

The Dow finished narrowly positive, up 0.1 percent 25.219,38, following a choppy session. Despite the muted finale, the week was the sixth straight positive close for the blue-chip index as it notched its best weekly gain since November 2016.

European stocks were broadly higher, while the dollar rebounded after striking a new three-year low against the euro and touching a 15-month low against the yen.

“European stocks are higher today as traders’ levels of optimism rise,” said market analyst David Madden at CMC Markets UK.

“The bullish momentum is growing, and the higher equity markets rise, the more it encourages other investors to jump on the bandwagon.”

Some, however, questioned the assumption stock markets were back in full swing, and had brushed off last week’s dizzying falls as a one-off correction. With AFP

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