Market likely to track sideways

Share prices may likely track a sideways movement this week on worries arising from the escalating trade war between the US and China.

Analysts said the decline in global equities due to the worsening US-China relations would continue to affect the movement of the local bourse over the short-term period and trigger foreign selling.

“Expect another volatile trading week to prevail, with attention (glued) to US-China trade talks and other local headlines,” online brokerage firm said.

“Funds flow would also gyrate given the month-end portfolio closing, as well as implementation of MSCI rebalancing. Cross-country weightings might favor China while other might look into safer havens in the securities market over the short run,” it added.

Given the market’s current trend, analysts urged investors to go for stocks with solid earnings and supported by good upside potentials.

Meanwhile, the government’s catch-up plan on infrastructure and socio-economic programs to meet the 2019 economic growth targets could boost market sentiments.

The domestic economy grew just 5.6 percent in the first quarter of 2019 mainly due to the delay in the passage of the 2019 national budget.

The Philippine Stock Exchange Index last rose 2.2 percent to 7,477.09 while the broader All Shares Index gained 1.5 percent to 4,781.85.

Except for mining and oil, which declined 0.8 percent, all other counters ended in the green led by holding firms (+4.33 percent), industrial (+1.42 percent), services (+1.28 percent), property (+0.81 percent) and financials (+0.36 percent).

Foreign investors were net sellers for the week by P5.6 billion, while the average daily value traded stood at P7 billion from the previous week’s average of P8.9 billion.

Weekly top price gainers were Aboitiz Equity Ventures Inc., which climbed 9.7 percent to P52.70; JG Summit Holdings Inc., which advanced 6.5 percent to P60.70; and Ayala Corp., which increased 5.9 percent to P900.

Weekly top price losers were LT Group Inc., which declined 10.8 percent to P15.10; PXP Energy Corp., which dropped 8.5 percent to P7.68; and Cemex Holdings Philippines Inc., which dipped fell 8.5 percent to P2.47.

Pound bobs around May resignation, stocks mostly gain

The British pound, meanwhile, bounced around Friday after Prime Minister Theresa May announced her resignation, while global stocks mostly recovered following a rout in the prior session on US-China trade tensions.

Sterling sank below $1.27 after May said she would step down as prime minister   on June 7,   paving the way for a contest to replace her. But the British currency later recovered and advanced against the dollar and euro.

“The pound will bounce around here and there but it won’t be going anywhere fast,” analyst Fawad Razaqzada told AFP.

“A lot now depends who will be the next leader of the Tories.”

The currency could face fresh turmoil, with key Brexiteer and former foreign minister Boris Johnson the front-runner to replace May.   

Ratings agency Moody’s warned that news of May’s departure “amplifies the uncertainty” over Britain’s withdrawal from the European Union, and “increases the risk of a no-deal Brexit.” With AFP

Topics: Stock Market , Philippine Stock Exchange Index , Philippine Stock Exchange , PSE , PSEi
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