Stocks are expected to continue moving south this week, as investors will likely remain on the sidelines ahead of the US Federal Reserve meeting.
“We maintain our view of the sideways to downward bias trend in the local market until a certain decision from the Fed meeting arises,” BDO Unibank chief investment strategist Jonathan Ravelas said over the weekend.
“However, with the increasing pipeline of infrastructure projects, including the recently approved NAIA public-private partnership project, we might see some select stocks to buck the trend,” Ravelas said.
Analysts said while traders had very low expectation of an interest rate hike in September, they would still look for clues on how the US Fed viewed recent economic data.
The Philippine Stock Exchange index, the 30-company benchmark, ended lower by 0.4 percent last week to close at 7,553.75 points on Sept. 16, on volatile trading while the all-share index gained 0.5 percent to settle at 4,558.17.
Reports that remittances from Filipinos working overseas, which fuel domestic consumption, fell 5.4 percent in July, the sharpest drop this year, also affected the domestic market, which bucked the uptrend on Wall Street and other Asian bourses.
The six major sub-indices ended mixed last week, with mining and oil, services, property and holding firms posting week-on-week declines, while financial and industrial sectors registering week-on-week gains.
Luis Limlingan, managing director of Regina Capital Development Corp., said last week’s volatile trading was a clear indication that the corrective press on PSEi was still too strong and that rallies should be used to unload positions.
“A consolidation above the 7,500 level needs to be established to stabilize prices and eventually offer another rebound,” Limlingan said.
Limlingan said a break below 7,500-point level could trigger a stronger corrective wave towards 7,400 to 7,280 level.
Overseas investors remained on the selling mode last week, as the bourse registered P4.2 billion in net foreign selling, slightly lower than the previous week’s net foreign selling of P7.2 billion.
Top gainers last week were Filinvest Development Corp. which climbed 6.9 percent to P7.75, Petron Corp. which jumped 6.2 percent to P10.20 and Rizal Commercial Banking Corp. which advanced 5.5 percent to P36.95.
Heavy losers were PLDT Inc. which dropped 7.4 percent to P1.666, Metro Pacific Investments Corp. which went down by 6.8 percent to P6.51 and GT Capital Holdings Inc. which dipped 5.3 percent to P1,401.