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Thursday, February 22, 2024

Stock market seen to rebound this week

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Stocks are expected move sideways this week with an upward momentum on technical rebound, analysts said over the weekend.

Regina Capital Development Corp. said the bellwether Philippine Stock Exchange index started to form a minor consolidation pattern with a trading range of 7,200 to 7,400 points.

“Momentum indicators are also shifting to sideways as seen from continuously falling volatility readings. We see increased chances of rebound to 7,360 to 7,400 levels,” Regina Capital said.

Investors will primarily monitor the upcoming meeting of the Federal Open Market Committee to discuss the US economy and possible policy actions, analysts said.

F. Yap Securities investment analyst Jason Escartin said a consensus was high among traders that policymakers would likely hold off on tightening policies until the latter part of the year, when inflation data would likely confirm a trend toward the Federal Reserve’s  2-percent target.  

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“Investors will continue to heed the expected timing and magnitude of a rate hike, depending on the progress of fresh economic data. Any indication for a status quo might aid buyers, as they check on short-term trading windows in stocks,” Escartin said.

The PSEi lost 0.9 percent last week to close at 7,255.39 Friday, on valuation concerns.

BDO Unibank Inc. chief investment strategist Jonthan Ravelas said the renewed China concerns also spooked investors, causing them to stay on the sidelines and await more convincing data to take on more risk.

Except for mining and oil, which advanced 0.7 percent, all major sub-indices ended in the red, led by services which dropped 1.9 percent, industrial which retreated 1.4 percent and financials which dipped 1.2 percent.

Foreign investors were net sellers last week by P941.6 million, as total foreign selling hit P16.1 billion while foreign buying amounted to P15.2 billion.

Top gainers last week were mining stocks including Global Ferronickel Holdings Inc., which jumped 9.1 percent to P0.96, Philex Mining Corp. which climbed 8.3 percent to P5.85 and Nickel Asia Corp. which rose 7.4 percent to P5.53.

Heavy losers were Melco Crown (Philippines) Resorrts Corp., which shed 16.3 percent to P2.15 and Trans-Asia Petroleum Corp., which declined 10.3 percent to P3.21. 

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