The stock market could drop further this week due to continued concerns over interest rate hikes, the fallout of tough trade talk from US President Donald Trump and an expected domestic inflation uptick.
Eagle Equities, Inc. research head Christopher Mangun said investors remained worried about consistent net foreign selling and the effects of increased liquidity.
“The Philippine central bank [recently]lowered the reserve requirement ratio to 19 percent which will pump P50-100 billion into our economy and some of those funds may find its way into the stock market,” he said.
“With the current trend, it may continue to trade lower as it is looking for strong support, which it may find at the 8,100 to 8,150 level before it starts to recover,” he added.
Diversified Securities, Inc. equity trader Aniceto Pangan, meanwhile, said investors should expect some volatility as US Treasury yields remain high, first stoked by the likelihood that the Federal Reserve could accelerate rate hikes and fanned further by Trump’s announcement that the US would impose new tariffs on aluminum and steel imports.
The release of February inflation data on Tuesday — many analysts expect a breach of the 2.0-4.0 target — could also trigger price movements.
First Grade Finance, Inc. Managing Director Astro del Castillo said the market would be hit by the lack of positive news.
Online brokerage firm 2TradeAsia.com, meanwhile, said investors should take “a wider perspective” and consider the merits of earnings prospects for the year.
“Learn to separate ‘noises’ within a stock price trend and review fundamentals that would warrant upside angles,” it added.
On Friday, the benchmark Philippine Stock Exchange index (PSEi) pared a 1.07 percent intraday decline to just 0.09 percent at the close, 7.20 points down from the previous day at 8,458.57.
The wider All Shares, meanwhile, dipped 0.24 percent or 12.29 points to close at 5,065.34.