Market to remain volatile this week

Share prices are expected to remain volatile this week as investors continue to look for leads abroad.

Headlining this week’s foreign news is the outcome of Greece’s referendum as well as fresh indications on the upcoming US Federal Reserve’s interest hike.

These happenings abroad, along with some bits and pieces of some local corporate updates, are seen to keep the market busy over the next five trading sessions as the benchmark index attempts to return to the 7,600 or even the 7,700 level.

“By the time the market opens this week, the results of the Greece referendum on the austerity-foraid proposal by creditors would be known,” said Justino Calaycay Jr., analyst at Accord Capital Equities Corp.

Calaycay said the outcome of the Greece’s austerity vote would determine whether Greece will retain or not its membership within the euro block.

“Curiously, 81 percent of Greeks favor staying with the euro, 12 percent support a return to using the drachma while seven percent either refused to answer or didn’t know,” he said.

Meanwhile, F Yap Securities investment analyst Jason Escartin said Fed’s minutes set to be released on July 9 would allow investors to “cull clues on the magnitude and timing of an interest rate hike that might happen in September.”

Escartin said foreign investors in local equities have already taken steps in previous months, with net selling in April at P10 billion, P9.3 billion in May, and P13.1 billion in June.

The Philippine stock market closed 1.14 percent lower weekonweek last Friday after euro zone ministers refused to extend Greece’s bailout after the latter defaulted on its €1.6-billion loan to the International Monetary Fund.

“We expect further volatility this week, as sentiment ebbs and flows on Greece. While the local economy’s exposure to the crisis is nil, concerns of regional spillover, especially on trade, could curb investors’ risk appetite. Moreover, foreign investors’ selling has pulled gauges from historic highs, prompting share buybacks among local firms,” Escartin said.

Analysts have placed immediate support at 7,450 to 7,500, while resistance is expected at 7,600 to 7,680.