Analysts expect volatile trading this week ahead of the US Federal Reserve’s policy meeting on Wednesday.
The rising interest rate will remain as the top concern of investors over the short to medium terms amid high inflation rate environment, they said.
The government reported last week that inflation hit a 14-year high of 8 percent in November, up from 7.7 percent in October on faster increases in the prices of food and non-alcoholic beverages.
Online brokerage firm Utrade.ph research analyst Neil Andrew Madaraje said while inflation rate showed signs of peaking, the market was expecting the Monetary Board to raise the benchmark interest rates on a lower magnitude.
Madaraje said the market’s sideways movement is a healthy correction from a recent run-up that started in October.
Meanwhile, online brokerage firm 2TradeAsia.com said volatile trading sessions would also continue as investors test the market’s staying power above the 6,500 level.
The 30-company Philippine Stock Exchange Index gained 1.4 percent last week to close at 6,580.12, up 1.4 percent from previous week’s finish amid sluggish trading.
The broader all-share index also inched by 0.52 percent to end the week at 3,437.40.
Meanwhile, US stocks tumbled Friday as stronger-than-expected wholesale prices triggered renewed jitters that the Federal Reserve would press on with an aggressive stance to counter inflation.
The market has been buffeted by lingering recession fears, and concern that the US central bank would keep up its steep rate hikes to cool the world’s biggest economy.
While consumer and wholesale inflation show signs of easing, data released Friday showed that producer prices still remained elevated.
The S&P 500 shed 0.7 percent, finishing at 3,934.38, while the Dow Jones Industrial Average lost 0.9 percent to end at 33,476.46.
The tech-rich Nasdaq Composite Index slipped 0.7 percent as well to 11,004.62.
“Wall Street had a somewhat mixed day of economic data,” said Edward Moya of the OANDA trading platform.
“A hot [producer price index] report was then countered by a University of Michigan report that showed inflation expectations are coming down quickly,” he said in a note.
For now, investors are keeping a close eye on economic data next week, with Tuesday’s closely-watched consumer price index to indicate whether inflation is easing.
While the Fed has raised the benchmark lending rate aggressively to tamp down surging prices, its Chair Jerome Powell recently indicated that the pace of increases could slow as soon as this month.
Its policy-setting committee will meet next week as well.
Among individual firms, activewear brand Lululemon plummeted more than 12 percent after reporting a weaker outlook for the fourth quarter. With AFP
