Investors at the Philippine Stock Exchange are expected to opt for range-bound trading as inflation fears will continue to weigh down investor sentiments.
Analysts said the continued increase in oil prices and the supply chain disruptions caused by China’s COVID-19 lockdown are affecting the prices of commodities that will lead to higher inflation and eventually increased interest rates.
The US Federal Reserve last week signaled that bigger rate hikes may be coming next month to curb the inflation rate.
“As the US Fed rate hikes and global trade uncertainties remain dominating, we expect resistance at 7,000 levels above,” online brokerage firm UTrade Inc. said in its weekly report.
Luis Limlingan, head of sales of Regina Capital Development Corp., said investors are also concerned the lockdown in China could temper profitability of some of listed companies.
Meanwhile, investors will be monitoring the release of first-quarter earnings report of listed companies as they could provide a clue and outlook on how firms will perform this year.
ThePhilippine Stock Exchange Index added 0.2 percent to 6,998.59 amid optimism on the economy after the International Monetary Fund raised the country’s gross domestic product target to 6.5 percent from 6.3 percent.
Three sectoral indices closed in the green. Mining and oil rose 3.6 percent; financials advanced 1.9 percent; and services climbed 1.6 percent.
The industrial index declined 2.2 percent; property fell 0.3 percent; and holding firms dropped 0.2 percent.
Weekly top price gainers include Nickel Asia Corp., which surged 9.8 percent to P8.37; Emperador Inc., which climbed 7.2 percent to P18.34; and Wilcon Depot Inc., which advanced 6.8 percent to P28.30.
Weekly top losers were GMA Network Inc., which sank 11.4 percent to P14.10; Manila Electric Co., which dropped 6.1 percent to P340; and Universal Robina Corp., which declined 5.2 percent to P111.40.
Meanwhile, global stock markets dropped sharply Friday as the latest hawkish commentary from the Federal Reserve sent investors fleeing equities on worries over higher interest rates.
Frankfurt lost 2.5 percent at the close and Paris ended off 2 percent as investors shrugged off a survey showing the EU bloc’s economic activity accelerated in April, while London lost 1.4 percent on the session.
Wall Street followed the glum trend, with the Dow finishing off 2.8 percent, or nearly 1,000 points, following an ugly session.
Helping to batter London was a sterling slump against the dollar to an 18-month low after data showed tumbling British retail sales amid a cost-of-living crisis. The euro also slid against the US currency.
Oil prices fell on demand fears arising from rising interest rates in the United States and Covid restrictions in China.
“(Price) risks are certainly more tilted to the upside, given the war in Ukraine and a potential embargo on Russian exports, but lockdowns in China and the risk of a Fed-driven economic slowdown are also significant,” observed Craig Erlam, Senior Market Analyst. With AFP