PHILIPPINE STOCKS may trade lower this week as investors stay cautious amid of the release of the third-quarter financial reports of more companies and as the market awaits catalysts.
On Friday, the benchmark Philippine Stock Exchange index (PSEi) declined by 72.43 points or 1.19% to close at 5,983.56, while the broader all shares index went down by 28.57 points or 0.88% to 3,195.04.
Still, week on week, the PSEi went up by 78.81 points or 1.33% from its close of 5,904.75 on Oct. 14.
Timson Securities, Inc. Head of Online Trading Marc Kebinson L. Lood said in a Viber message that the market ended lower on Friday as it continued to track losses on Wall Street.
“The PSEi continues to fall as a reflection of Wall Street’s [Thursday] performance. The US market fell on Thursday as strong labor statistics and hawkish Federal Reserve remarks supported expectations for more combative rate hikes,” Mr. Lood said.
On Thursday, the Dow Jones Industrial Average dropped 90.22 points or 0.3% to 30,333.59; the S&P 500 fell 29.38 points or 0.8% to 3,665.78; and the Nasdaq Composite went down by 65.66 points or 0.61% to 10,614.84.
However, Wall Street rebounded on Friday after a report said the Fed may consider a smaller interest rate hike in December.
“Philippine shares logged their second straight day of bathing in the red as investors came out of a tumultuous day with bond yields rising and wide-ranging corporate earnings,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message on Friday.
AP Securities, Inc. Equity Research Analyst Carlos Angelo O. Temporal said in a Viber message on Friday that profit taking also continued to affect local stocks.
“Following the end of the short-term rally, we are seeing a downward bias for the index this week with a potential to retest support level of 5,700,” Mr. Temporal said.
Meanwhile, Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message that there may be bargain hunting this week as stock prices remain attractive.
“This week, the local market may take cues from the movement of local and US yields, as well as from the peso. A rise in the yields amid the hawkish policy outlooks of the Federal Reserve and the Bangko Sentral ng Pilipinas is seen to pose downside risks,” Mr. Tantiangco said.
“Investors are also expected to look forward to third quarter corporate reports which is seen as the hope for a catalyst,” he added.
Regina Capital’s Mr. Limlingan said the market will also focus on US data on manufacturing, economic growth and jobs, among others, to gauge the Fed’s next action.
“Here at home, there may be some window dressing to end the month and before the long four-day holiday. Some third quarter earnings may affect some individual stocks movements if they are released,” Mr. Limlingan said.
2TradeAsia.com put the PSEi’s support at 5,800 and resistance at 6,000-6,100, while Philstocks Financial’s Mr. Tantiangco put immediate support at 5,700. — A.E.O. Jose