Stocks are expected to keep moving downhill this week, as investors weigh the prospects of further monetary easing in Europe and Japan and on concerns the US Federal Reserve may raise interest rates this month.
Analysts said investors were waiting for the outcome of the US Federal Open Market Committee meeting on Sept. 20 and 21. Regional markets will also monitor the Bank of England meeting and the release of US industrial production figures this week.
“Weak industrial production will also make the prospects of a near-term Fed rate hike even less likely. Additional stimulus from the BoE meanwhile will make investor sentiment even more upbeat, partially offsetting the disappointment from ECB’s [European Central Bank] lack of additional stimulus,” BPI Asset Management said in a weekly outlook report.
BDO Unibank chief investment strategist Jonathan Ravelas said the market could test the 7,500-point level this week, after the benchmark index dropped below 7,700 level last week.
“Failure for the 7,500 levels to hold could call for further losses towards the 7,250 levels. However, given the decline for the fifth straight week, a pullback could occur but limited towards the 7,760 to 7,780 levels,” Ravelas said.
The Philippine Stock Exchange index, the 30-company bellwether, dropped 2.9 percent last week to close at 7,581.79 on Sept. 8, while the broader all-share index fell 2.1 percent to 4,534.32, on political jitters.
President Duterte declared a state of a state of emergency to address lawlessness in the country, following the bombing in Davao City.
Duterte’s crude comments against President Barack Obama also raised concerns among investors over the new president’s diplomatic policy.
Except for financials which climbed 1.3 percent and mining and oil which was marginally up, other sub-indices ended in the red led by property which plunged 5 percent and holding firms which declined 2.6 percent.
Foreign investors were net sellers of P7.4 billion last week, as total foreign selling reached P25.7 billion while foreign buying amounted to P18.24 billion.
Top gainers last week were Security Bank which jumped 14 percent to P248, Megawide Construction Corp. which advanced 13 percent to P15.80 and Rizal Commercial Banking Corp. which rose 6.8 percent to P35.
Heavy losers were Andrew Tan-owned stocks Emperador Inc. which fell 11.8 percent to P6.70 and Megaworld Corp. which went down 7.5 percent to P4.55. SM Prime Holdings Inc., the largest property developer, also tumbled 6.4 percent to P26.90.