STOCKS traded sideways on Tuesday following a long weekend break as most investors opted to stay on the sidelines ahead of the release of the official domestic inflation data for September.
Sentiment was generally cautious after Wall Street slipped overnight and following the World Bank’s recent downgrade of its economic forecasts for the Philippines.
In addition, investors are also waiting for the release midweek of the minutes of the US Federal Open Market Committee’s (FOMC) meeting last month.
The Philippine Stock Exchange index (PSEi) was down 7.65 points or 0.11 percent at 7,239.38, while the broader All Shares index hardly moved, inching up 1.02 points or 0.02 percent to 4,278.11.
The Philippine financial markets reopened yesterday following a three-day break with Monday declared a regular holiday.
Astro del Castillo, First Grade Finance Inc. managing director, said via phone that the market ended flat as investors “were playing safe”, awaiting the delayed inflation data.
The September inflation data was expected to be released Tuesday but is now set to be released today, October 8.
“Investors remained cautious on inflation. The profit-taking was also caused by the World Bank trimming its projections on our economy,” del Castillo said, noting that the release of September inflation data today will influence the market’s movement this week.
In its recent East Asia Pacific Economic Update, the World Bank lowered its Philippine gross domestic product (GDP) projections for 2014 to 6.4 percent from the 6.6 percent announced last April due to a slower first-quarter GDP, weaker government spending in the second quarter, and monetary policy tightening.
Luis Limlingan, managing director of Regina Capital Development Corp., said in a separate phone interview that the market followed the lead of the US market, which posted losses overnight.
“I think [the PSEi is]just following the US markets. Investors are also awaiting the minutes of the FOMC meeting as well as the Redbook index that helps analyze retail sales,” he added.
Limlingan said he expects the market to trend upward in the coming days. “The consensus is that the inflation is favorable. If it holds true, the market will be higher,” he said.
He expects the market to trade in a range of 7,200 to 7,350 points this week and sees the next support level at 7,160 and resistance at 7,400.
The sectoral indices were mixed. Financials slipped 0.68 points or 0.04 percent to 1,706.07; holding firms lost 9.49 points or 0.15 percent to 6,392.02; and property fell 28.73 points or 1.02 percent to 2,792.21.
On the other hand, industrials were up 60.94 points or 0.53 percent at 11,631.71; services added 7.26 points or 0.34 percent to 2,119.61; while mining and oil advanced 61.98 points or 0.37 percent to 16,761.23.
Among the actively traded stocks, Philippine Long Distance Telephone Co. ended flat at P3,044. There were three gainers — Universal Robina Corp., GT Capital Holdings Inc., and Energy Development Corp. — while the rest were decliners.
The top losers were Ayala Land Inc., Megaworld Corp., SM Investments Corp., Alliance Global Group Inc., Ayala Corp. and Robinsons Retail Holdings Inc.
Advancers outnumbered decliners 98 to 70, while 52 stocks were unchanged. Total volume traded was 11.758 billion shares valued at P12.68 billion.
On Friday, the bellwether PSEi rose 50.77 points or 0.71 percent to 7,247.03, recovering from its losses the previous day, while the broader All Shares index likewise went up 26.57 points or 0.63 percent to 4,277.09.