Trading at the Philippine Stock Exchange is expected to remain volatile, with the index nearing the bear market, amid lingering fears over slowing economy, rising inflation and tightening interest rates.
Analysts said the depreciation of the peso against the US dollar and the rising COVID-19 cases in the country were contributing to investors’ concerns.
“The week’s close at 6,331.56 signals the bears are in control. Further decline towards the 6,000 to 6,300 levels is probable in the near term,” BDO Unibank Inc. chief investment strategist Jonathan Ravelas said.
The benchmark Philippine Stock Exchange index will enter the bear market once it drops to 6,041.76.
A bear market condition happens when a stock index declines by 20 percent or more recent highs over a sustained period on pessimism and prevailing negative investor sentiment.
The US S&P 500 Index last week entered bear territory as inflation fears continued to mount.
Analysts said, however, the market’s recent decline could provide investors opportunity for bargain hunting as many stocks significantly dropped from recent highs.
The PSEi plunged by 3.04 percent last week to close at 6,331.56, while the broader all-shares index retreated 3.33 percent to 3,394.95. All sub-indices ended in the red, with services declining by 4.34 percent; holding firms, 3.98 percent; industrial, 3.22 percent; property, 2.55 percent; mining and oil, 2.3 percent; and financials, 1.24 percent.
Foreign investors turned into net sellers last week by P3.6 billion. The average daily trade value reached P7.86 billion, up from the previous week’s average of P5.5 billion.
The top gainers last week were Emperador Inc. which advanced 5.3 percent to P17.90; Semirara Mining and Power Corp., which picked up 4.7 percent to P35.70; and Bank of the Philippine Islands which rose 2.4 percent to P94.80.
Heavy losers included Wilcon Depot Inc., which declined 15.3 percent to P23.30; Converge Information and Communications Technology Solutions Inc., which fell 13.5 percent to P20.15; and Megaworld Corp., which lost 13.1 percent to P2.26.
Global stock markets wobbled and oil prices sank on Friday amid growing fears that inflation-fighting interest rate hikes by central banks could trigger recession.
Investors were shaken last week after the US Federal Reserve unleashed its biggest hike in borrowing costs for almost 30 years to tackle red-hot consumer prices.
The third Fed increase was followed by the fifth straight hike by the Bank of England and the first in 15 years by the Swiss central bank, underscoring the growing global concerns about inflation.
The moves caused a global selloff on Thursday. US and European markets tried to stage a rebound on Friday, but some indices were back in the red later in the day. With AFP