Stocks seen sideways as mart looks to earnings
THE LOCAL BOURSE is set to heed news from abroad and digest more corporate earnings results slated for release this week ahead of the holiday break.
The market took a breather last week as investors took gains after successively breaching record highs.
The Philippine Stock Exchange index closed at 8,295.95 on Friday, down 1.48% or 125 points week on week.
Declines were registered in several sectors such as financials, which went down 2.41%; holding firms, down 2.55%; and property, down 0.70%.
Meanwhile, mining and oil saw gains during the week, advancing 1.89%, after the Mining Industry Coordinating Council ( MICC) lifted its ban on the open-pit extraction method.
Average turnover totaled P4.6 billion. Advancers tied with decliners at 95 to 95. Foreigners were sellers, ending the week with net selling at P532 million.
“Very little is expected with a three-day trading session this week, as investors take their cue from headlines from abroad,” said online brokerage firm 2TradeAsia. com in a statement, noting the two-day meeting of Federal Reserve members set to start on Oct. 31.
“Markets are likely to weigh in [US President Donald J.] Trump’s appointee with the expiration of current Fed chief [Janet L.] Yellen’s term. Pending the succession episode, the backdrop of a Fed red hike remains largely unchanged, as players make their best estimates on its timing,” the firm added.
Mr. Trump is leaning toward nominating Federal Reserve Governor Jerome Powell to be the next head of the US central bank, two sources familiar with the matter said on Friday.
Mr. Trump has said he has been considering Mr. Powell, as well as Stanford University economist John Taylor, for the post. He has also said he has not ruled out renominating current Fed chair, Ms. Yellen, whose term expires in February.
He is expected to announce his pick, which would need to win Senate approval, before he departs on a trip to Asia on Nov. 3.
Mr. Trump had been working from a short list of five candidates that included his top economic adviser, Gary Cohn, and former Fed Governor Kevin Warsh.
AB Capital Securities, Inc. Senior Research Analyst Lexter A. Azurin said investors are likely to take cues from third-quarter corporate earnings results.
“We’ve seen some companies start to report last week such as Meralco (Manila Electric Co.) and a couple of cement companies,” Mr. Azurin said in a text message over the weekend.
2TradeAsia.com noted that investors will be largely dependent on the earnings stream and listed firms’ dividend payout policy.
“Attention could shift in stocks fit for day-trades, specifically secondand third-tiers. Trade within range and avoid being trapped in shares with limited historical trading liquidity,” it added.
Immediate support is pegged at 8,200 points, while resistance is seen at 8,300 to 8,350 points. •