There are only two trading days this week, December 22 and 23 and the last for the year at December 29.
Given the limited time, traders are flipping coins- worry about Russia and dropping prices or window dress favorite issues. It could also mean that foreign investors would be in a hurry to unload shares.
BPI Asset Management said the Philippine Stock Exchange index (PSEi) will trade within a broad range of 6,896 points to 7,224 points, with “ bias to the downside on possible continuation of foreign selling”.
The global crude oil prices are continuously falling, down to about $55 per barrel from the $100 per barrel price in June.The decline in oil prices is raising alarm among foreign investors as oil-centric economies like Russia are doomed in the petroleum dilemma. Massive foreign selling has been observed in equities market across the globe, including the Philippines.
On another note, RCBC Securities Inc. Vice President and Head of Research Raul Ruiz told The Manila Times that the market is poised to go up in the last trading days of the year with investors buying bargain stocks from the previous lows in the market.
“Remember that in the days before, the local market was going down because of the downward influence of the global markets, which in turn were being dragged by fears that the drop in the price of oil reflects a weakening global economy. This time around, with global markets rising, notably New York, Tokyo and Hong Kong, the Philippine market followed the recovery,” Ruiz said.
For his part, F. Yap Securities Inc. Investment Analyst Jason Escartin also agreed that the local market will be tightly observing the oil prices and the Russian economy, while also getting positive influence from the US Federal Reserve’s assurance to financial markets that benchmark interest rates are “unlikely to return to more normal levels’ until 2017″ and that it will be “patient” before hiking interest rates.
“Until the dust settles at the crude market, several might still seize on intra-day rallies to cash-out, especially with the long Yuletide break ahead. Nonetheless, we emphasize the fact that fundamental dynamics for Philippine equities remain solid, and that players would soon realize on its resilience despite global challenges ahead,” Escartin said.
He noted that the immediate support is at 7,050 to 7,100 points, while resistance is at 7,200 to 7,300 points.
On Friday, the bellwether PSEi surged by 1.37 percent or 96.35 points to 7,125.63, while the wider All Shares likewise perked up by 1.09 percent or 45.25 points to 4,195.81.