Share prices are expected to move sideways this week on renewed fears of a global economic slowdown.
The Philippine Stock Exchange Index last week recovered from the previous week’s steep decline but the stock market needed more consistent foreign buying and strong volume to push the benchmark index back to the 8,000-point level, analysts said.
BDO Unibank Inc. chief investment strategist Jonathan Ravelas said the lower February inflation print and prospects of some monetary easing in the coming months could provide a boost to the market.
“The week’s close at 7,797.11 highlights some support exists near 7,500 levels. Look for test of the 7,950/8,000 levels in the near-term. Failure to test the said levels could signal a retest of the 7,500 levels,” Ravelas said.
Newly-appointed Bangko Sentral ng Pilipinas Governor Benjamin Diokno said last week there was “room” for monetary easing given the decelerating inflation.
Diokno also expressed plans to expedite a reduction in the reserve requirement.
The inflation rate in February fell to 3.8 percent on slower increase in food prices.
The PSEi last week rose 2 percent to close at 7,797.11, while the broader All Shares Index gained 1.8 percent to 4,817.22.
Except for the mining and oil which declined 2.6 percent, all other sectoral indices ended in the green, led by financial (+4.6 percent), industrial (+2.1 percent), services (+2.1 percent), holding firms (+1.4 percent) and property (+0.50 percent).
Foreign investors were net sellers during the week by P296.5 million, while the average daily value traded stood at P5.9 billion, down from the previous week’s average of P11.1 billion.
Weekly top price gainers were Philippine National Bank which rose 21 percent to P59.90, Metro Pacific Investments Corp., which advanced 7.6 percent to P4.52, and BDO Unibank Inc., which climbed 7.5 percent to P133.
Weekly top price losers were PAL Holdings Inc., which wfell 7.2 percent to P10.30, Semirara Mining and Power Corp., which declined 6.4 percent to P20.35, and Del Monte Pacific Ltd., which lost 5.2 percent to P6.07.
World stock markets, meanwhile, dropped Friday amid fears over global growth following weak US job figures, a downgrade to the European Central Bank growth forecast, and data showing Chinese trade fell off a cliff last month.
US data showed job creation ground to a virtual halt in February, just the latest warning of a lean growth ahead, after the ECB slashed its growth and inflation forecasts and China unveiled a growth target that would be its slowest in three decades.
Bourses in Europe and Asia finished solidly lower. Wall Street also retreated, although an afternoon rally kept losses to a minimum. The broad-based S&P 500 finished down 0.2 percent.
US employers added just 20,000 net new positions in February, collapsing from a blockbuster gain of 311,000 in January and far below the 173,000 economists had projected, according to a US Labor Department report. With AFP