Share prices this week are expected to retreat to recent low levels as investor sentiments continue to be weighed down by rising interest rates and a growing trade war.
Analysts said investors are expected to remain cautious and hesitant about investing in the stock market given the several negative sentiments hounding the market.
“Should the index encounter more weakness next week, expect its initial support near the 6,900-7,000 levels, the area of its most recent lows,” Papa Securities trader Gio Perez said.
BDO Unibank Inc chief investment strategies Jonathan Ravelas said the latest inflation rate report reignited fears among the investors that another round of interest rate hike could be looming.
“The week’s close of 7,186.71 signals the market’s retreat from its assault of the 7,500 levels and resumes another attempt below the 7,000 levels,” Ravelas said.
The inflation rate surged to a five-year high 5.2 percent in June from 4.6 percent in May and much higher than 2.5 percent registered in the same month last year.
Analysts said the high inflation rate in June would likely require further monetary policy response as early as August.
At the same time investors, investors are awaiting the impact of the trade war between China and United States that took effect Friday.
The Philippine Stock Exchange Index in the first trading week of July ended lower by 0.1 percent to 7,186.71, while the All Shares Index dipped 0.12 percent to 4,387.34.
Foreign investors were net sellers by P1.59 billion, while the average daily value traded stood at P4.9 billion, down from the previous week’s average of P6.2 billion.
Weekly top price gainers were Wellex Industries Inc., which rose 32 percent to P0.310; Globe Telecom Inc., which advanced 8.2 percent to P1,667; and Robinsons Retail Holdings Inc., which climbed 5.6 percent to P83.95.
The weekly top price losers were Nickel Asia Corp., which dropped 7.9 percent to P4.27; ABS-CBN Corp., which fell 7.9 percent to P23.30; and Metropolitan Bank & Trust Co., which declined 4.9 percent to P69.75.
Global stock markets advanced Friday, overcoming earlier wobbles prompted by China and the United States firing opening salvos in a trade war that pits the world’s two biggest economies against each other.
Wall Street gained on the back of a solid US employment report that was strong enough to reassure investors of the health of the economy, but did not exhibit robust enough wage growth to suggest the Federal Reserve will need to raise interest rates more aggressively.
All three major US indices ended higher, with the Nasdaq chalking up its second straight gain of more than one percent.
European markets finished modestly higher, even as trade worries remained investors the biggest concern, dealers said.
US President Donald Trump on Friday rolled out 25 percent tariffs on $34 billion of Chinese goods in what Beijing called the “largest trade war” in economic history.
China said it was hitting back with retaliatory measures on US goods but did not immediately provide precise details on what products would be targeted in the first wave. With AFP