Market seen timid in shortened trading week

MANILA, Philippines - The local stock market is in for a timid performance in the shortened trading week as investors and fund managers take a break during the Lenten season.

Investors might be encouraged to unload stocks, with further movements to be dictated by US inflation data and first quarter China’s gross domestic product, analysts said.

“We can expect a lackluster performance this week as market activity would be weaker ahead of the long holiday,” Abbygayle M. Estrella, analyst at AB Capital Securities Inc.

“Little activity is expected to transpire during a three-day trading week, as investors prepare for the Lenten pause,” said Rens Cruz, investment analyst at online brokerage firm 2TradeAsia.com.

Astro del Castillo, managing director of First Grade Finance Inc., said the stock market will be hovering around 6,500 level on light trading. Financial markets will be closed on Maundy Thursday (Apr. 17) and Good Friday (Apr. 18).

Week-on-week, the Philippine Stock Exchange index rose 0.55 percent or 35.76 points to end at 6,596.96. On Thursday, the main index closed at 6,638.89, its highest since ending at 6,656.71 on Aug.14, 2013.

For this week, foreign news will continue to influence the local market.

Estrella said weighty catalysts awaited by global investors are US inflation figures and retail sales data. For world’s second largest economy China, global markets should watch out for industrial production data and first quarter economic growth.

“While foreign developments will still provide heads-up, we note that the market will be needing a breather, now that it has consolidated above 6,550 after failing to break the 6,650 level,” Estrella said.

“With shortened trading sessions this week, several might be prompted to cash out for now, until buying appetite resumes after the Lenten break,” Cruz said.

2TradeAsia.com pegged the immediate support at 6,500-6,550 and resistance at 6,650-6,700.

Cruz said Wall Street’s decline might also add to the selling mood while traders look on speculative stocks for short-term gains.

On Friday, the Dow Jones industrial average lost 0.89 percent or 143.47 points to 16,026.75 while the broader Standard & Poor’s 500 index shed 0.95 percent or 17.39 points to 1,815.69, dragged again by biotech and other momentum stocks.

“We advice investors to be astute because of the opportune scenarios: prices are attractive to short; while a correction that can be considered as a pullback could be a buying opportunity,” Estrella said.