MANILA, Philippines - The local stock market is likely to maintain a sideways range amid mounting pressures in overseas markets brought about by Europe’s sovereign debt crisis and lingering concerns over a speedy recovery by the US.
Jun Calaycay of Accord Capital Equities said the market will continue moving sideways, between a low of 4,250-70 to a high of 4,300-4,330.
Last week, the PSEi managed to eke out a 0.54 percent or 23 point gain to close at 4,297.62.
“The index will still be consolidating next week and we’ll see more of the swings we have experienced this week.
Drivers for the index’s direction will be the same companies which have been in the spotlight lately with their own respective developments. However, the gentle tug of the foreign markets will still be felt especially with the debt worries and economic recovery efforts of the major countries,” said AB Capital Securities Inc.’s Maria Arlysa Narciso.
Narciso said while domestic economic data is highly monitored, there is no lasting and drastic effect to the market and to the investors’ sentiments.
“The divergence in the PSEi’s technical indicators only prove that the market lacks conviction to move on either direction and instead will keep its sideways trend,” Narciso said.
The government last week reported that the economy recorded a 4.9 percent growth in the first quarter, slightly on the low end of the government’s range of 4.8 percent to 5.8 percent. The slowdown was caused by lower remittances from the Middle East and the crisis in Japan.
Among the market movers last week were Lepanto Mining, Philex and Manila Mining, all three were aggressively bought up in heavy volumes.
San Miguel gained 6.3 percent last week to end at P116.90 per share as investors cheered the new developments in its units.
San Miguel Brewery together with Japan’s Kirin are in talks to comply with the bourse’s minimum public float. At the same time, SMB announced it was putting up new botling facilities to further strengthen its dominant foothold in the local market.
Calaycay said investors are concerned over slumping US economic figures. “Having significant impact on the market were a bigger-than-expected slide in consumer confidence, a substantial squeeze in new hirings and a one percentage point rise in the unemployment rate,” he said.
He said Japan Prime Minister Naoto Kan’s announcement of vacating his post has heightened political tensions during a period when the world’s third largest economy is still feeling the ill-effects of twin natural disasters that struck its northeastern region last March.