After last week’s sluggish trade which saw the benchmark index skid for five straight days, the local stock market may have to endure yet again a volatile week with investors still left hanging on the weight of developments from the US Federal Reserve.
Carlos Jalandoni, research head of BPI Asset Management, said that the market will probably be quite volatile due to the US Fed tapering its $85-billion a month bond-buying program.
In its market report, online brokerage 2TradeAsia noted that last week, the US Fed hinted that it might consider reducing stimulus measures in the coming months, with probable signs of improved economic data.
Papa Securities Inc. analyst Freya Natividad said on Friday that the report that the US Fed might taper its stimulus measures in the coming months has upset the market in the past few trades.
“Parang negative bias ang lumalabas na news [the news are on negative bias], those weigh on the PSEi performance,” Natividad said, referring to the Philippine Stock Exchange.
Now, the local market is expected to trade lower amid absence of fresh leads from the local and international side.
“We will see the market trade at a range of between 6,000 [points]and 6,200 [points],” Jalandoni noted. For the five straight days last week, the local market stayed idling in red territory with not much leads globally and locally showing up.
“Red was the week’s dominant color for bourses, after gauges slumped for five straight sessions,” 2Trade Asia said.
The PSEi ended Friday’s trade with a 0.62-percent decline, or 38.05 points to 6,084.84. This is the lowest since closing the closing of September 9, 2013, trade when the index plummeted toward 5,997.04 points.
According to Natividad, the market was still affected by the aftermath of Super Typhoon Yolanda, and weighed by the lack of fresh leads. Other analysts support this view.