The stock market could see muted trading this week with analysts noting the lack of catalysts that could trigger a renewed push to 9,000 territory.
The benchmark Philippine Stock Exchange index (PSEi) returned to the 8,600 level on Friday, inching up 0.17 percent or 14.33 points to close at 8,612.44, while the wider All Shares eked out a 0.06-percent gain or 2.80 points to finish at 5,075.60.
“We saw the market stabilize above 8,500 which is our major support. I am convinced that the market will continue to trade sideways as we build up trading volume and wait out the continued foreign selling,” Eagle Equities, Inc. research head Christopher John Mangun said.
“There are several trading gaps to be filled on the way up to retest the 9,000 level which I think we will see in a few weeks,” he added.
Mangun said investors could focus on second-tier issues and speculative stocks while awaiting blue chip firms to regain strength.
In a separate comment, brokerage firm 2TradeAsia said the timing of the next US Federal Reserve rate hike could continue to worry investors, especially given higher January inflation and a decline in retail sales.
“Our take here is that more time will be needed for other confirmatory signals before the Fed committee considers tightening its policies. It would also be ‘too premature’ to put a cap on growth, unless consumer prices spike more than what the US labor market could absorb,” it said.
“Remember the concept of funds flow, as those cashing-out might just be preparing to reposition once the market has settled.”
Thin trading volumes are also expected given China’s week-long Lunar New Year holiday.