Share prices are expected to move sideways this week with a downward trend as investors await the outcome of the May 10 Monetary Board meeting and the release of the first-quarter economic growth figures.
Analysts said most investors were already expecting the Monetary Board to increase the overnight rates by 25 basis points after the inflation rate rose to an over five-year high of year 4.5 percent in April.
BDO Unibank Inc chief investment strategist Jonathan Ravelas said the domestic economy probably grew 6.8 percent in the first quarter of 2018, citing median estimates. The estimated first-quarter gross domestic product growth is slightly higher than the revised 6.5-percent expansion in the first quarter of 2017.
Philstocks Inc. research head Justino Calaycay said investors remained cautious after the stock market index failed to sustain its recovery.
“Optimism is a scarce commodity nowadays. At best, we experience and observe one of the cautious types. The PSEI has created a wide distance with the all-time high—a sour note for most. However, we’d rather look at the situation as a glass-half-full –the selling pressure appears to have dissipated, offering a signal that a bottom is near, if not reached,” Calaycay said.
“We can aptly describe current market conditions as having “some drag, with little or no lift,” he added.
The Philippine Stock Exchange Index last week dropped 2.3 percent to 7,546 while the boarder All Shares Index declined 1.4 percent.
All major sub-indices were also in red, led by property (-2.6 percent), holding firms (-2.3 percent), financials ( 2 percent), services (-1.8 percent), mining and oil (-0.6percent and industrial (-0.003 percent).
Foreign investors were net sellers for the week by P1.37 billion, while the average daily value traded stood at P6.6 billion.
Weekly top price gainers were LT Group Inc., which climbed 11.1 percent to P21.90; Metro Pacific Investments Corp., which rose 5.8 percent to P5.10; and East West Baking Corp., which advanced 5.8 percent to P17.12.
Weekly top price losers were Aboitiz Equity Ventures Inc., which declined 10.6 percent to P62.20; Del Monte Pacific Ltd., which dropped 9.1 percent to P9; and GT Capital Holdings Inc., which lost 6.4 percent to P980.
Wall Street stocks, meanwhile, powered higher Friday after a mixed US jobs report was seen as reducing the odds of faster Federal Reserve interest rate hikes.
US stocks initially went sideways following the jobs data but began moving gradually higher after the open, with the Dow ultimately finishing up a solid 1.4 percent.
Earlier, European stock markets rose, while oil prices pushed higher on speculation President Donald Trump will spike the Iran nuclear deal.
The US economy added 164,000 jobs in April, which was below expectations. But the unemployment rate fell to 3.9 percent, the lowest since December 2000.
Investors were cheered by signs inflation pressures remained tame, as average hourly wages rose just 0.2 percent. That figure was seen as reducing the odds the Federal Reserve will accelerate interest rate hikes. With AFP