Market may experience low volume this week

MANILA, Philippines — The stock market may experience thin volumes this week because of the shortened trading week, traders said.

“Shortened trading week may result in low volume of trading on a week-on-week basis,” said Piper Chaucer Tan, research associate at Philstocks Financials.

Foreign Capital outflow will be a major factor on whether we can hold participation of local funds and bargain hunting will be the drive of our local bourse moving forward,” he said.

Thus, Tan noted, “we are leaning to those stocks which have been resilient toward market shocks and fundamentally undervalued.”

The result of US-China talks may create negative sentiment to the market because no breakthrough has been reached.

Another set of tariffs would translate to more bearish sentiment as well as the hawkish stance of the Fed, analysts said.

“This will hold the index at 7,800 level and a support at 7,500, the latest candlestick showing a weakness in volume and respecting the 200 exponential moving average,” Tan said.

Christopher Mangun of Eagle Equities said the market performed very well last week, thanks to the increase in traded value and huge gains of the San Miguel companies, but said “we are not in the clear yet.”

The index, he said, is coming up against very strong resistance at 7,800.

“If it can break above this level this week, then there is no doubt that the index will go back to 8,000 with ease. However, there are only four trading days this week and we may see lower volumes. If this happens, then we may see it trade sideways or come back down to support at 7,600,” Mangun said.

 There is no indication that the US Federal Reserve will be raising interest rates at the annual Jackson Hole symposium.

“Nevertheless, the Fed’s hawkish stance may continue to strengthen the dollar and we may see foreign funds continue to flow out which will continue to hurt emerging markets,” he said.

The PSEi rose by 182.95 points or 2.41 percent last week despite having only four trading days. Value turnover was P27.07 billion.