Stocks are expected to move sideways this week, as the start of the “ghost month” and rising inflation may dampen investor sentiment.
“With the start of the Chinese ghost festival, expect turnover to remain light,” online brokerage firm 2TradeAsia.com said.
Investors are likely to focus on the earnings season as preliminary results show that companies had positive second-quarter results.
The assuring statement from US Federal chairman Jerome Powell that the US economy is not in recession could provide investors some relief.
“Indications for less aggressive interest rate hikes are in the cards, especially with the Bangko Sentral ng Pilipinas’ preliminary hint for its upcoming monetary policy meeting this month,” 2TradeAsia.com said.
This could provide interest rate-sensitive sectors some breathing room after the successive rate hikes.
The BSP has raised key policy rates by 125 basis points since May, bringing the overnight reverse repurchase rate to 3.25 percent from 2 percent.
The benchmark Philippine Stock Exchange index last week inched up by 0.84 percent to 6,315.93 on bargain hunting. The all-share index also climbed 0.53 percent to 3,398.82.
Five of the six sectoral indices ended in the green, led by financial which rose 1.9 percent; services by 1.94 percent; mining and oil by 1.72 percent; property by 1.2 percent; and holding firms by 0.71 percent. Industrial went down by 1.4 percent.
Foreign investors were net buyers last week by P545 million, while average daily turnover went up to P6.9 billion from the previous week’s average of P4.4 billion.
Top gainers last week were Wilcon Depot Inc., which jumped 20.2 percent to P27.65; Aboitiz Equity Ventures Inc., which climbed 8.8 percent to P57.05; and Union Bank of the Philippine, which increased 8.7 percent to P80.70.
Heavy losers included Cemex Holdings Philippines Inc., which lost 17.4 percent to P0.71; 8990 Holdings Inc., which dropped 8.8 percent to P9.30; and Jollibee Foods Corp., which went down by 4.5 percent to P201.20.
Meanwhile, European stocks advanced last week following better-than-expected GDP report, while Wall Street stocks were boosted by solid earnings from Amazon, ExxonMobil and others.
The EU’s official data agency said the 19-country eurozone’s economy grew by 0.7 percent in the second quarter, far stronger than expected by analysts.
Countries reliant on tourism showed better-than-expected resilience, with growth in France and Spain gaining strength as visitors took advantage of unrestricted travel to the world’s top destinations.
Wall Street stocks, meanwhile, rallied for a third straight day. The broad-based S&P 500 finished at 4,130.29, up 1.4 percent for the day and 4.3 percent for the week.
Investors shrugged off the latest indicator of US inflation, as government data showed the personal consumption expenditures price index jumped 1.0 percent in June compared to May, outpacing income gains, which rose just 0.6 percent.
Stocks have risen the last three days, digesting the Federal Reserve’s second straight 75 basis point increase and negative GDP data suggesting a heightened risk of a US recession.
“The Fed has a clear path to continue with aggressive hikes, but many are still thinking they’ll be inclined to go at only a half point in September,” said Oanda’s Edward Moya. With AFP