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Volatile trading to remain this week

Trading at the Philippine Stock Exchange is expected to remain volatile this week as investors sentiments continue to be weighed down by concerns on higher inflation and interest rates.

Online brokerage firm 2TradeAsia.com, however, said it was not worried about the possibility of inflation rate going up as the growth of the economy accelerates.

“For as long as this growth is paralleled by improved employment, there should be no cause for alarm. Our monetary officials are also there to ensure no unreasonable occurrences disrupt the system’s funds flow that could trigger runaway inflation,” the online brokerage firm said.

“For ordinary consumers/investors, it would all boil down on effective budget management and improve people’s zest to search for higher returns. And equities provide in general, a base where dividend yields may be obtained plus capital appreciation prospects,” it added.

The Bangko Sentral ng Pilipinas last week said it expects inflation rate in February to range between 4 percent and 4.8 percent from 4 percent in January.

Given the the local bourse’s current movement, analysts advised investors to carefully evaluate the the earnings prospects of companies this year.

The PSEi last week ended lower by 0.1 percent to 8,458.57 on volatile trading, while the All Shares Index was flat at 5,065.23.

Major sub-indices ended mixed, with holding firms, property and mining and oil closing in the red, while the financials, industrials and services posting week-on-week gains.

Foreign investors were net sellers by P3.9 billion, while average daily value traded stood at P8.7 billion.

Weekly top price gainers were Universal Robina Corp., which advanced 6.9 percent to P153; LBC Express Holdings Inc. which rose 6.8 percent to P15.36; and Puregold Price Club Inc., which advanced 6.5 percent to P52.20.

Weekly top price losers, meanwhile, were JG Summit Holdings Inc., which declined 10.7 percent to P64.70; LT Group Inc., which dropped 6.6 percent to P21.70; and Ayala Land Inc., which fell 5.4 percent to P41.50.

Wall Street stocks, meanwhile, finished mostly higher Friday as bargain hunting of technology shares offset worries of a trade war after President Donald Trump vowed tariffs on imported steel and aluminum and many other goods.

The Dow Jones Industrial Average finished down 0.3 percent at 24,538.06, its fourth straight decline.

But the other two leading indices ended their three-day losing streaks.

The broad-based S&P 500 added 0.5 percent to end the week at 2,691.25, while the tech-rich Nasdaq Composite Index rose 1.1 percent to 7,257.87

Equity markets across Asia and Europe fell steeply following Trump’s announcement Thursday of the tariffs, which was followed Friday by a series of provocative statements on Twitter that seemed to invite a trade war.

US stocks also opened sharply lower before reversing course, with the Nasdaq gaining the most momentum as the session progressed.

“You had a pretty big downdraft yesterday for this and we still don’t know the details,” said Art Hogan, chief market strategist at Wunderlich Securities.

“None of it is going to be good, but the devil is in the details,” Hogan said of the proposed tariffs. With AFP

Topics: Volatile trading
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