Sideways trading expected this week
Trading may move sideways with a downward bias at the local market this week as peso volatility is expected to persist, analysts said.
Traders anticipate a sideways market with a downward bias this week, according to analysts. The Philippine Stock Exchange index (PSEi) closed last week at 6,090.60, marking a 2.25 percent increase week-on-week. Financial research manager Japhet Tantiangco explained that the local market rebounded above the 6,000 level last week due to bargain hunting; however, overall investor confidence remains low, as indicated by low value turnover.
During last week's four-day trading period, participation decreased by 40 percent to P25.3 billion, while net foreign selling dropped to P1.35 billion from P7 billion the previous week. Analysts believe the market could continue to trade within a bearish range between 6,000 and 6,150. First Metro Investment Corp.'s head of research, Cristina Ulang, predicts the PSEi will trade in a narrow range between 5,900 and 6,100 due to a weak peso.
Any dovish (US) Federal Reserve policy, such as a steady stance at their September 15 meeting, could support the peso and potentially trigger a PSEi recovery. The report from 2TradeAsia.com anticipates another week of volatility for the peso-dollar exchange, with rising dollar demand to support inventory ahead of the holiday season.
They advise investors to consider stocks with strong foreign exchange hedging strategies and remain cautious about inflation, as the real test of disinflation will become apparent later in the fourth quarter. The report also notes that the end of the Ghost Month festival is close to the Federal Reserve's mid-month meeting, advising traders to stay liquid and prepared for potential market fluctuations based on Fed-related speculation.
Written by urgent.news from Philippine Star Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
