Stock market likely to move sideways

Share prices are expected to move sideways this week with an upward bias as the season’s semester-end portfolio window dressing could push the market higher.

Online brokerage firm said the second phase of the reserve requirement cut by the Bangko Sentral ng Pilipinas from 17.5 percent to 16.5 percent, or 50 basis points, would pump in additional liquidity into the financial markets.

“Go for stocks with promising prospects as major infra backbone are deployed,” said.

Investors will also monitor the June 28-29 G20 meeting, which could possibly discuss the US-China trade war.

The Philippine Stock Exchange Index last week rose 0.8 percent to close at 8,055.47, while the broader All Shares Index gained 0.9 percent to 4,927.81.

Except for the property index which declined 0.2 percent, all other sub-indices ended in the greed, led by mining and oil which rose 2.1 percent; holding firms which climbed 2 percent; industrial which advanced 1 percent; financial which added 0.8 percent; and services, which inched up 0.5 percent.

“The market actually started the week on a downward trajectory because of renewed foreign selling, although it reversed course and went on a four day winning streak as locals were encouraged by positive developments on US-China trade on Wednesday as well as the dovish tones set by both the Fed and the BSP, hinting towards possible rate cuts down the road,” said RCBC Securities analyst Fiorenzo De Jesus.

Foreign investors were net sellers during the week by P1.17 billion, while the average daily value traded stood at P7.2 billion, down from the previous week’s average of P7.9 billion.

Weekly top price gainers were GT Capital Holdings Inc., which climbed 9.9 percent to P961; Manila Water Co Inc., which rose 5.9 percent to P25; and San Miguel Food and Beverage Inc., which gained 51 percent to P113.50.

Weekly top price losers were LBC Express Holdings Inc., which fell 9.4 percent to P14.02; Philippine National Bank, which declined 7.1 percent to P49; and Pilipinas Shell Petroleum Corp., which dropped 5.8 percent to P38.

Gold prices, meanwhile, struck near six-year highs on Friday as a weaker dollar and escalating US-Iran tensions fueled a flight to safer investments, while oil futures built on strong gains.

The week has been an eventful one for stock markets, crude prices and the dollar—and investors still have a key G20 summit to look forward to amid hopes for progress on the US-China trade war.

“Gold has been one of the week’s biggest stories, with the precious metal hitting $1,400 (an ounce) for the first time in almost six years overnight,” said Joshua Mahony, senior market analyst at IG trading group.  

The gold spike has been caused by the change in sentiment and dollar weakness amid “overnight talk of a canceled US strike on Iranian targets highlighting how close we are from a huge ramp-up in conflict between the two nations,” he said.

US President Donald Trump said he approved the attack then at the last minute scrapped strikes against Iranian targets. With AFP

Topics: stock market , Philippine Stock Exchange , PSE , Philippine Stock Exchange Index , PSEi
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