Trading at the Philippine Stock Exchange will remain volatile this week on worries about rising oil prices that are pushing inflation rate and interest rates higher.
Analysts said investors are worried that prolonged elevated oil prices coupled with weakening of the peso against the dollar may lead to lower corporate earnings due to margin pressures.
The upcoming presidential elections is also causing investors to stay on the sidelines.
Investors are looking ahead to the start of the earnings season that could provide an indication on how companies will perform for this year.
“Note that we are one month away from what is dubbed as the most polarizing national elections in local history, a possible 50 basis points rate hike from US Federal Reserve, and full blast in earnings reports. Range trade and keep a level head, as the market attempts to find better footing near 7,000 level,” said online brokerage firm 2TradeAsia.com.
The Philippine Stock Exchange Index last week slipped 0.5 percent to 6,984.90 on thin trading.
All other sub-indices ended in the red, except for holding firms. The mining and oil index fell 1.7 percent, property dropped 1.4 percent, financial declined 1 percent, industrial sector lost 0.3 percent and services dipped by 0.3 percent.
Foreign investors were net sellers for the week by P1.25 billion, while the average daily value traded reached P4.19 billion from the previous week’s average of P4.69 billion.
Weekly top price gainers were Emperador Inc., which jumped 21.3 percent to P17.10; Wilcon Depot Inc., which advanced 5.4 percent to P26.50; and Filinvest Land Inc., which rose 3.8 percent to P1.07.
Weekly top price losers were PXP Energy Corp., which fell 10.1 percent to P4.90; DMCI Holdings Inc., which dropped 4.3 percent to P8.72; and Century Pacific Food Inc., which declined 3.6 percent to P22.65.
Meanwhile, Asian markets dipped Friday after a negative lead from Wall Street, with investors around the world worried about surging inflation.
Central banks in several major economies including the United States, Canada and Britain have already started raising interest rates to contain prices, but the European Central Bank on Thursday kept its stimulus plans and rates unchanged.
That sent the euro plunging to a near two-year low, but eurozone stocks were boosted while Wall Street retreated ahead of the Easter holidays.
The mood was subdued in Asia too, where only a handful of markets were open on Good Friday.
The Nikkei 225 closed 0.3 percent lower with Wall Street’s woes depressing sentiment.
Analysts had expected China’s central bank to cut interest rates on Friday to provide support to the COVID-stricken economy.
But the People’s Bank of China left them unchanged.
“That’s somewhat surprising given the sharp economic downturn and recent calls from China’s leadership for monetary support,” Julian Evans-Pritchard of Capital Economics said in a note.
“It underscores the reluctance of the central bank to aggressively ease policy. But we think it will have little choice but to do more before long.”
Shanghai was down 0.5 percent at the close. With AFP
