Share prices are expected to move sideways with a downward bias this week amid lingering concerns on rising inflation and interest rates and the peso depreciation against the US dollar.
Analysts said investors were anticipating more interest rate hikes over the near term to curb the rising inflation. Investors were also wary about another possible rate adjustment because of Federal Reserve’s hawkish tone.
The government last week reported that inflation rate eased to 6.3 percent in August after five consecutive months of acceleration.
The Bangko Sentral ng Pilipinas’ Monetary Board so far raised key policy rates by a cumulative 175 basis points this year that brought the overnight borrowing rate to 3.75 percent from an all-time low of 2 percent last year.
“The market may remain range-bound as drivers to value, both off- and on-shore, are seen to fluctuate over the remainder of the third quarter,” online brokerage firm 2TradeAsia.com said.
“Quality assets are underscored where to reduce the impact of ‘motion sickness’, while the market attempts to base-build,” it said.
The benchmark Philippine Stock Exchange index dropped 1.3 percent last week to close at 6,606 points, while the broader all-share index slipped 1.2 percent to 3,506.47.
All sectoral indices posted week-on-week losses. Property dropped 1.68 percent; holding firms, 1.44 percent; industrial, 0.98 percent; services, 0.89 percent; financial, 0.34 percent; and mining and oil, 0.19 percent.
Foreign investors were net buyers by P1.16 billion last week, as the average daily turnover improved to P6.1 billion from the previous week’s average of P4.65 billion.
Top gainers last week were Apex Mining Co. Inc., which climbed 11.1 percent to P1.80; DMCI Holdings Inc., 7.9 percent to P10.50; and Bloomberry Resorts Corp., 6.3 percent to P7.40.
Heavy losers included ACEN Corp., which fell 7.8 percent to P7.04; JG Summit Holdings Inc., 7.5 percent to P50.10; and Megaworld Corp., 4.8 percent to P2.36.
Meanwhile, Wall Street stocks ended higher Friday, extending a positive run for equities after earlier stumbles as investors come to terms with the inevitability of more central bank interest rate hikes.
Many investors had viewed US stocks as oversold, in the wake of recent declines, with the Federal Reserve policies favoring aggressive policy tightening no longer generating fear.
Fed Governor Christopher Waller on Friday was the latest to reaffirm the hawkish stance to combat rising prices.
He warned that lowering inflation would take time, and said he supports another “significant increase” in the benchmark lending rate at the September 20-21 policy meeting.
Still, investors have become more optimistic about inflation.
“Economists are slightly lowering their inflation forecasts and that could mean the Fed won’t have to take rates above four percent,” said Oanda’s Edward Moya.
The S&P 500 finished at 4,067.36, up 1.5 percent for the day and 3.6 percent for the week, snapping a three-week losing stream.
The Dow Jones Industrial Average gained 1.2 percent to close at 32,151.71, while the tech-rich Nasdaq Composite Index jumped 2.1 percent to 12,112.31. With AFP