Trading at the Philippine Stock Exchange is expected to remain volatile this week, with sell-offs in emerging market assets likely to dominate amid renewed global trade concerns.
Gabriel Jose Perez, sales associate at Papa Securities Corp., said foreign selling and concerns of a possible rate hike due to the higher-than-expected August inflation rate, along global trade concerns would continue to weigh in on the market this week.
“We should remain vigilant if foreign selling continues next week, more so that the PSEi is already in the area of its support level at 7,500. External issues to watch out for over the weekend and next week would be the US—China trade war, and potential developments in emerging markets like Turkey and Argentina which might weigh again on global uncertainty,” Perez said.
BDO Unibank Inc chief investment strategist Jonathan Ravelas said the bellwether Philippine Stock Exchange Index could experience a technical rebound this week after the market’s sharp drop last week.
“Continue to see the market to range between the 7,500/7,800 levels in the near-term. However, a break below the 7,500 levels could call for further losses towards the 7,000 levels. But given the sharp drop this week, expect a technical rebound in the week ahead to retry the 7,800 levels,” Ravelas said.
The PSEi last week fell 3.3 percent to 7,598.64 as investors turned wary on rising inflation rate, which could trigger another round of interest rate hike increase.
All counters ended in the red, led by financials (-5.18 percent), property (-4.9 percent), holding firms (-3.21 percent), mining and oil (-3.13 percent), services (-0.74 percent), and industrial (-0.26 percent).
Overseas investors were net sellers by P4.4 billion while the average daily value traded stood at P6.08 billion from the previous week’s average of P7.05 billion.
Weekly top price gainers were Philippine H2O Ventures Inc., which rose 8.8 percent to P5.54; San Miguel Corp., which advanced 4.7 percent to P177; and Universal Robina Corp., which climbed 3.8 percent to P144.90.
Weekly top price losers, meanwhile, were Nickel Asia Corp., which declined 10.6 percent to P4.85; Ayala Corp., which dropped 8.3 percent to P917; and BDO Unibank Inc., which slumped 7.6 percent to P120.20.
World equities, meanwhile, stumbled Friday on worries over the US-China trade war that were amplified by a threat of fresh tariffs by President Donald Trump.
Trump jolted markets at midday by renewing threats to impose levies on all US imports of Chinese goods. Washington has already slapped duties on $50 billion in Chinese goods and plans are underway for tariffs on another $200 billion.
But Trump told reporters on Air Force One that “there’s another $267 billion ready to go on short notice if I want.”
That would cover about 100 percent of the goods the United States imports from the world’s second largest economy.
Some US stocks were in positive territory part of the morning but indices fell to session lows following Trump’s remarks. The major indices later cut their losses, but still finished in the red. With AFP