MANILA, Philippines—Sluggish market trading is widely expected to persist this week on a string of concerns over the European Union’s fiscal crisis and China’s weak factory output.
Last week, the Philippine Stock Exchange index fell by 0.95 percent to 4,261.59.
Reflecting weak global sentiment, US stocks fell for a seventh straight day on Friday. The closely watched Dow Jones Industrial Average dropped by 25.61 points, or 0.23 percent, to 11,231.94.
“Sentiments in the troubled regions, including some Asian nations, are still pessimistic. The absence of a solid guidance on where EU leaders will direct the region, expectations of a weaker US economy as seen in the latest batch of statistics, and the slowdown in China’s manufacturing all pose worries to investors,” said Maria Arlysa Narciso, an
analyst at AB Capital Securities.
“If Europe cannot get its act together and agree on how to contain the debt situation, the effects may just continue to spill over. Quite fortunate for the Philippines, we do not have substantial exposure to the region, except perhaps our exports sector,” she said.
If the local index fails to move higher, Narciso said it could consolidate within the 4,200 to 4,300 range.
“There is very little from which to borrow optimism as the market heads into week 48 of trades for 2011,” said Justino Calaycay Jr., a dealer at Accord Capital Equities Corp.
He noted that technical indicators also suggested caution.
“The fundamental front, on the other hand, is clouded by external events that nevertheless threaten to cast doubt on the validity of the premises for the country’s economic growth projections, both for the current year and the next,” Calaycay said.
Meanwhile, local corporate earnings for the third quarter turned out generally mixed, even if a good number of heavyweights and favorites managed to eke out double-digit year-on-year profit growth, he said.—Doris C. Dumlao