Uncertainties, particularly with regard to external developments, remain very much on investors’ minds and will likely determine stock market movements this week, analysts said.
With the market having dropped—but not too deeply—into 7,800 territory, Eagle Equities, Inc. research head Chris Mangun said the bellwether Philippine Stock Exchange index (PSEi) was likely to trade around 7,900 with a resistance of 8,000.
“The key to the deal is volume. We need to see a pick-up in volume if we are going to see this market recover,” he said.
“Meantime, small to mid-cap companies will continue to be more profitable for retail investors.”
The PSEi lost 1.78 percent on Friday, shedding 143.09 points to close at 7,899.98 on the back of renewed foreign selling and concerns over rate hikes, a possible US-China trade war and renewed Middle East tensions.
The broader All Shares declined 1.32 percent or 64.17 points to finish at 4,794.65.
Diversified Securities, Inc. equity trader Aniceto Pangan said Philippine shares could see more consolidation absent more positive earnings results.
“Aside from this, we will continue to see volatility in the external markets due to trade war and the geopolitical risks on the Middle East, particularly Syria,” he added.
The US followed through early on Saturday on a threat to strike Syria over a deadly chemical attack on civilians. Markets had calmed somewhat coming into the weekend after US President Donald Trump said he was putting off a decision.
Still, US markets fell on Friday as bank earnings sparked a sell-off in financial shares. Profit-taking traced to investors wary of Trump’s moves also hit European bourses, which still closed marginally higher.
Online brokerage firm 2TradeAsia.com, for its part, said uncertainties would prevail locally for as long “as this market has non-believers of a recovery phase.”
“Long-term investors aiming for good real returns will have more time on their hand to wait until the selling tide abates and more windows will present itself for bargain-hunting opportunities,” it added.