Sideways trading seen this week

Trading at the Philippine Stock Exchange is expected to remain sideways during this shortened trading week as investors monitor the outcome of the US Federal Reserve slated this week.

US Fed, which is widely expected to cut interest rates for a third time this year, is slated to meet on Oct. 29 to 30. Bank of Japan is also meeting toward Oct. 31. 

Meanwhile, release of third-quarter earnings will also continue to affect the market trading this week. So far several banks and cement firms have reported positive third quarter earnings results.

Likewise, investors will likely take their positions ahead of the MSCI rebalancing next month.

“The  week’s close at 7,926.88 continues to highlight the market to consolidate  within the 7,700/8,000 levels in the near-term. Expect the bounce to stretch towards the 8,000 levels in the near term. Failure to try the  8,000 level could cause some profit taking and retest the 7,700 level,” said BDO Unibank Inc. chief investment strategist Jonathan Ravelas.

The Philippine Stock Exchange Index last week rose 0.45 percent to 7,922.50 while the broader All Shares Index inched up 0.2 percent to 4,767.03.

Four out of the six sectoral indices ended in the green. The mining and oil index gained 3.4 percent, while the financials rose 1.9 percent. Holding firms climbed 0.9 percent while services added 0.08 percent.

The industrial index, however, declined 1.6 percent while the property sector dipped 0.3 percent.

Foreign investors were net buyers for the week by P1.47 billion while the average daily value traded stood at P5.2 billion.

Weekly top price gainers included Semirara Mining and Power Corp., which rose 5.7 percent to P23.80; D&L Industries Inc., which advanced 4.2 percent to P8.65; and Bank of the Philippine Islands, which gained 4.1 percent to P99.

Weekly top price losers were DMCI Holdings Inc., which tumbled 9.8 percent to P8.20; ABS-CBN Corp., which fell 4.6 percent to P18.50; and Universal Robina Corp., which dropped 4 percent to P150.

Wall Street, meanwhile, finished a solid week on an upbeat note Friday as the S&P 500 flirted with a record following upbeat comments from US trade officials about progress in China talks.

The US Trade Representative’s office said officials were “close to finalizing” some parts of the a trade agreement with China announced two weeks ago.  

Details have remained scarce and the two sides have not announced plans to roll back any more tariffs after Washington held off on some duty increases this month.

Yet a more “constructive” tone on trade lifted sentiment along with benign economic data and decent earnings, said Art Hogan, chief market strategist at National Securities.

“The news is good and the reaction of the market is good,” Hogan said.

The broad-based S&P 500 flirted with a record, but in the end finished at 3,022.55, a gain of 0.4 percent but about three points below the all-time high set in July.

Stock markets were mixed in Europe and Asia, while the pound dipped against the dollar as Brexit remained in limbo while European Union leaders squabbled over how much of an extension to grant Britain to approve the latest Brexit agreement. With AFP