Range-bound trading seen

Stocks ended the week lower as a combination of local and external factors prompted investors to stay on the sidelines instead of making large bets, analysts said.

Data from the Philippine Stock Exchange showed that the benchmark Philippine Stock Exchange index (PSEi) was down 13.89 points to 6,880.34 from the previous Friday’s close of 6,894.23.

“The stronger-than-expected inflation rate in July, concerns over the escalating conflict in Ukraine and [US President] Obama’s approval of air strikes in Iraq spooked investors,”  Jonathan Ravelas, chief strategist at BDO Unibank Inc., said in a note to investors. Ravelas said that technical indicators further suggested that the key 7,000-level for the PSEi was a tough resistance to break.

“Continue to expect the index to remain range bound between the 6800-7000 levels in the week ahead,” Ravelas said in his note. The previous week also saw some of the major corporations starting to report first-half results.

Philippine Long Distance Telephone Co., the country’s biggest telecommunications firm, saw core profit during the first six months of 2014 increase 2 percent to P19.8 billion while service revenues rose 2 percent to P82.5 billion.

SM Investments Corp., which owns the country’s biggest shopping mall franchise and biggest bank, saw net income decline 3.1 percent to P12.3 billion due to the absence of extraordinary trading gains at its banking business.

More corporations were expected to report earnings results in the coming days, which could help set the tone of trading in the near term, First Grade Finance Inc. managing director Astro del Castillo said in an interview. Miguel R. Camus