TRADING is expected to be volatile on the last trading week of the year as investors may spend the holiday break planning their market strategies, while government spending may improve market sentiments.
The bellwether Philippine Stock Exchange index (PSEi) dropped by 66.19 points or 0.91% to 7,181.86 on Friday, while the broader all shares index decreased 16.19 points or 0.42% to 3,882.26.
Week on week, the 30-member PSEi went down by 115.80 points from its 7,297.66 close on Dec. 17.
“The market failed to build from last week’s strength as participants cashed in gains ahead of the holiday break,” online brokerage 2TradeAsia.com said in an e-mail sent over the weekend.
2TradeAsia.com said soft trading is expected this week as traders take their time to mull strategies for next year, adding that investors must be selective in the sectors in order to yield better results in 2022.
It also said spending might fluctuate during the election season, making soft market days such as next week useful for investors to adjust their portfolios before the market strengthens in the first quarter.
Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said in an e-mail that the latest profit taking was “partly brought about by new record high new coronavirus disease 2019 (COVID-19) cases in some European countries, partly due to the Omicron variant, which could slow down economic recovery prospects amid travel and other restrictions as a matter of prudence to prevent Omicron from spreading further.”
Last Tuesday, the World Health Organization (WHO) warned countries of a significant surge in COVID-19 cases as the Omicron variant spreads, Reuters reported.
As of Sunday, the Philippine government reported three Omicron-positive patients in the country ahead of the holidays.
Meanwhile, First Metro Investment Corp. Head of Research Cristina S. Ulang said the market might advance on infrastructure rebuilding and government spending in areas battered by Typhoon Odette.
On Saturday, the Department of Budget and Management released P1 billion in taxpayers’ fund to be given to local governments under a state of calamity.
The national disaster agency on Thursday reported an estimated P3.6-billion infrastructure and agriculture damage left by the typhoon.
“With most of next week on holiday, we may continue to have a volatile market at below average volume turnover with a window dressing going to the yearend,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message.
RCBC’s Mr. Ricafort placed next week’s immediate major support at between 7,060 and 7,110, while the immediate resistance at 7,200-7,260 levels. — Marielle C. Lucenio