Analysts expect the stock market to experience a healthy correction over the near-term period after the index climbed by more than 600 points in the last two weeks.
Online brokerage firm 2TradeAsia.com said the technical correction is needed before the market retests the 7,000-point level.
“A rising tide does not come every day, thus healthy corrections from time to time should be expected given the velocity of the recent ascent. This is also true especially as the index retests the critical 7,000 level zone,” the online brokerage firm said.
“In the case, range-trading may be optimal for now but note that laggards whose valuations have been late to the part and may offer higher alpha (growth) in the long term,” it added.
Among the factors that could push the market are stable inflation rate in the country and the continued vaccine rollout, which could result in further easing of mobility restrictions.
The bellwether Philippine Stock Exchange Index last week posted its straight week of weekly gains, gaining 1.8 percent to close at 6,796.23. The broader All Shares Index also climbed 1.5 percent to 4,108.59.
All sectoral indices ended in the green, led by financial which rose by 2.6 percent, property which advanced 2.4 percent and holding firms which gained 1.9 percent.
Foreign investors were net buyers for the week by P5.17 billion while the average daily value traded reached P10.87 billion, down from previous week’s average of P11.96 billion.
Weekly top price gainers were First Gen Corp., which advanced 7.8 percent to P30.95; D&L Industries Inc., which climbed 7.9 percent to P7.94; and Philippine National Bank which rose 7.7 percent to P23.
Weekly top price losers were Philex Mining Corp., which declined 6.7 percent to P6.90; Puregold Price Club Inc., which dropped 3.8 percent to P37.75; and Rizal Commercial Banking Corp., which fell 3.8 percent to P17.22.
Global equity markets, meanwhile, moved higher while the dollar fell on Friday after tepid job US growth numbers assuaged fears of a rapid reduction in stimulus measures and interest rate hikes.
The start of a Group of Seven finance ministers meeting drew investors’ attention as well, with Europeans optimistic the world’s wealthiest countries will support US-backed plans for a global minimum corporate tax.
US Labor Department data released before Wall Street trading began showed the world’s largest economy added 559,000 jobs in May, below expectations for the second straight month but an improvement on April.
That was good news for equities, as investors have feared the roaring return of the US economy would push the Federal Reserve to “taper” stimulus measures sooner than markets have been expecting.
“This employment report was not too hot, not too cold obviously and I think that the fact that we didn’t see any big hike in the wages suggests that the Fed is not going to be in a hurry to accelerate any tapering debate sooner than anticipated,” said Peter Cardillo of Spartan Capital Securities.
The Dow ended up 0.5 percent while the tech-rich Nasdaq added 1.5 percent. With AFP