Share prices are expected to move sideways this shortened trading week on bearish sentiment.
Financial markets are closed Monday to give way for the observance of Eid’l Adha.
Philstocks Financial Inc. research head Japhet Tantiangco said the market turned bearish amid the negative economic developments.
“The market’s 50-day exponential moving average has also gone below its 200-day counterpart forming a death cross which indicates the possibility of a downtrend moving forward. All in all, the market’s chart has shown bearish developments,” Tantiangco said.
He said that while the market’s recent decline could provide opportunities for bargain hunters, this could not lead to a rally.
He said investors were waiting for positive catalysts, primarily one which would hint of monetary policy easing soon in the Philippines.
“Hence next week, unless we see positive developments on the outlook of our interest rates, the local market may only move sideways with bargain hunting providing the upside force. Downside risks including the less dovish outlook of the Federal Reserve and the sustained weakness of the Peso may continue to weigh on market sentiment,” he said.
Chart wise, the market may still test the 6,400 level. However, if it fails to get back above the 6,400 upper level, the market’s new trading range moving forward is seen from 6,150 to 6,400, analysts said.
The Philippine Stock Exchange Index lost 20.7 points last week to close at 6,383.70, as the US Federal Reserve communicated that only one rate cut could happen this year, instead of the original projection of three due to stubborn inflation.
Average daily value traded declined to P3.58 billion from the previous week’s average of P5.4 billion.
Overseas selling continued, amounting P1.28 billion.