Volatile trading is expected to prevail this week as investors await the US Federal Reserve’s move on interest rates. US stocks fell Friday on disappointing job data.
Analysts said this could weigh on the market, as hopes for US Fed rate during its policy meeting next week fade.
Online brokerage firm 2TradeAsia.com said, however, the country’s macroeconomic fundamentals are turning better following the recent rate cut by the Bangko Sentral ng Pilipinas (BSP), the continued easing of inflation rate and strengthening of the peso against the US dollar.
Concerns over the health of the US economy is tempering the market’s rally.
“Investors are expected to monitor this narrative,” Philstocks Financial Inc. research head Japhet Tantiangco said.
“On a positive note, the latest inflation figures are seen to strengthen the case for the continuation of the BSP’s monetary easing. This in turn is seen to drive optimism in the market,” he said.
The market’s immediate support is at 6,850 this week, while resistance is at 7,000 to 7,100.
The main composite index rose 0.56 percent to close at 6,936.09, while the all-shares index advanced by 0.27 percent to 3,752.86 last week.
Average daily turnover dropped to P5.34 billion from the previous week’s average of P8.02 billion.
Foreign investors were net buyers last week, with net inflows amounting to P1.25 billion, lower than the previous week’s buying of P2.35 billion.
