The stock market will likely trade sideways this week on lack of incentives to accumulate on stocks.
Analysts expect the trading volume to remain thin as investors are still wary about the overall developments in the economy.
The market may be ripe for a technical rebound due to its recent decline, but analysts said investors will be quick to cash in on gains.
Meanwhile, First Metro Investments Corp. head of research Cristina Ulang still expects the Philippine Stock Exchange Index to reach 7,100 points by the end of the year, fueled by attractive valuation and positive investor sentiment.
Ulang said the new government’s pronouncement to continue policy reforms, economic expansion, infrastructure rollout, and market-friendly measures were among the factors that would drive the market upward in the second half of the year.
She said the higher-than-expected domestic inflation and interest rates, the escalation of the Russia-Ukraine war and other geopolitical events were some of the risks that could affect market sentiments.
The PSEi last week closed at 6,195.26, down 2.6 percent from the previous week’s level, while the broader All Shares Index declined 1.9 percent to 3,345.73.
Four of the sectoral indices ended in the red led by holding firms, which dropped 4.7 percent; property which sank 4.3 percent; mining and oil which fell 2.9 percent; and services which slipped 2.7 percent.
The industrial index rose 0.6 percent while financials inched added 0.04 percent.
Foreign investors were net sellers by P2.58 billion, while the average daily value traded was steady at P4.8 billion.
Weekly top price gainers were Monde Nissin Corp., which climbed 8.1 percent to P14.10, Emperador Inc. which advanced 6.5 percent to P18.40, and Manila Electric Co., which increased 3.7 percent to P363.
Weekly top losers were Ayala Land Inc. which slumped 13 percent to P22.55, Puregold Price Club Inc. which dropped 10.6 percent to P29, and Ayala Corp., which fell 10.5 percent to P575.
Meanwhile, US stocks soared Friday after retail sales data showed that US consumers continue to spend more in the latest signal of the economy’s resilience despite high inflation and rising interest rates.
Better-than-expected results from Citigroup also helped temper concerns about what lies ahead for investors as more companies report second-quarter results.
The euro held above $1.00, having sunk below parity this week on fears Russia would cut off Europe’s gas supplies in retaliation for Ukraine war sanctions.
Oil prices rebounded, after slumping Thursday on recession fears.
Wall Street pushed higher on a better-than-expected 1.0 percent rise in retail sales in June.
While not adjusted for inflation, sales were still up 0.7 percent even when gasoline was removed from the calculation, according to the Commerce Department data.
“This could be good news for US GDP which suggests that the economy may well avoid a contraction in (the second quarter), and ergo a technical recession,” said analyst Michael Hewson at CMC Markets. With AFP