Investors advised to stay cautious
As the market heads towards a volatile week with not many leads underway, investors are advised to stay cautious.
Luis Limlingan, managing director at Regina Capital Development Corp., said in a text message that “a more cautious stance is advised this week as the index continues to struggle.”
“For buying strategy, we recommend staying light on positions and wait for a clear support bounce before accumulating… we expect a choppy weekly trade with trend bias on the downside due to weakening technical,” Limlingan said.
In its weekly data, BPI Asset Management agreed that market participants should stay on the sidelines once again as everyone continues to seek more cues on the Federal Reserve’s December rate decision.
“We thus expect markets to trade in range, though with a downward bias as investors remain cautious,” it said.
Amid the lack of leads, local stock market ended last week’s trade on a negative note, with Philippine Stock Exchange index (PSEi) falling by 72.17 points, or 1.03 percent to 6,921.93. The wider all shares also went down by 34.48 points, or 0.86 percent to 3,993.23. All the sectors were also down.
BPI Asset Management said the local equities market and local government prices marginally declined week-on-week because investors remained cautious ahead of the release of the critical November employment data in the US.
Global equities also fell back, and the US Treasury yield curve continued to flatten, as investors reacted to perceived dovish comments from Fed Chair Janet Yellen in one of her speeches during the week.
“The gist of her rhetoric was that a December rate hike was not yet off the table. The US dollar closed last week hardly changed following the traditional lull over the Thanksgiving holiday week. Into this week, the greenback traded sideways with an upward bias on relatively poor US economic releases and in anticipation of the ECB [European Central Bank] meeting Thursday and the November US non-farm payrolls on Friday,” the BPI report further noted.