Stock market seen lackluster this week

Trading at the local stock market is expected to be lackluster this week given concerns over the recent explosion at the Glorietta mall in Makati, rising world crude oil prices and fears that the US economy may not be able to continue to push ahead. “With the bombing incident in Makati and the jump in world crude oil prices, we should see uneasy investors next week,” said AB Capital Securities over the weekend.

Last week, the PSEi closed 4.45 points or 0.12 percent lower week-on-week at 3,819.75.

“With the market’s distress over external and domestic political issues, we expect share prices to correct this week. The main composite index has failed to breakout of the 3,800 resistance level in a convincing manner,” AB Capital Securities said.

“The market has been swamped by excessive liquidity due to the current low interest rate levels. However, investors must remember that hot money can go out as briskly as they come in. We believe that market fundamentals may have reached a major peak this year. Not that we see a major reversal in fundamentals, but rather a slight erosion. Market bulls might get disappointed if they are expecting the economy and corporate earnings to grow as fast as it has this year,” AB Capital Securities added.

Adding to investors’ concerns is the slowdown in the US housing market which is expected to create a significant drag on economic expansion into the early part of next year.

Oil prices have been on the rise, hitting $90/barrel level last week amid further tensions between Turkey and Kurdish rebels in Northern Iraq.

On the local economic front, the National Government reported a narrower-than-expected budget deficit of P14.5 billion in September.