PSE seen tracking US market movements

Philippine share prices will likely track movements on Wall Street this week, with growing doubts over the strength of the world’s economic recovery expected to weigh down any possible rally in the local market.

The benchmark Philippine Stock Exchange index (PSEi) ended in the red on Friday, shedding 78 points, or 1.82 percent, week on week.

Although there was some positive news in the local front—such as government estimates showing that inflation was likely lower in May, these seemed not sufficient to offset risk aversion caused by the weakness of the US markets and the prolonged debt troubles in Europe.

“The lack of positive developments and a strong sense of economic improvement caused the local market to slack off,” brokerage firm AB Capital Online said in its weekly review.

Trading at a tight range, the index is restricted to moving between 4,200 and 4,340 up until next week, it said.

Aside from external influences, the company said the weakness across the board is also responsible for the index’s lower close.

“Not a single index issue was the sole factor to drive the market to drop,” it said, leaving the PSEi to settle at 4,219.58 points.

“Local catalysts are lacking, as seen in how the market reacted to the recent inflation data,” AB Capital said.