PH stocks start week in the red

THE Philippine Stock Exchange on Monday started the week in the red, down by 0.97 percent at 6,467.01.

According to Regina Capital Development Corp. Managing Director Luis Limlingan, Philstocks Financial Inc. senior research analyst Japhet Tantiangco, and Rizal Commercial Banking Corp. chief economist Michael Ricafort, investors seem to be preparing for a more aggressive Federal Reserve Bank Fed response due to the surge in prices, which is expected to be at least a half-point rate hike.

The US May inflation print, which came in at 8.6 percent or faster than the preceding month’s 8.3 percent, has raised worries over the possibility of more hawkish monetary policy actions by the Fed, which could lead to higher borrowing costs/financing costs for some listed companies worldwide.

The further depreciation of the peso below the P53:$1 level and reports of a potential higher Alert Level in Metro Manila due to an increase in Covid-19 cases also clobbered investor sentiment.

Tantiangco also noted that some bargain hunting could happen at some point this week, given that the market has already declined for three consecutive days with a total loss of 4.47 percent. But he still advised caution.

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“Our outlook for the market for this week is still biased to the downside amid the headwinds at play including the weakening peso, inflation and hawkish outlook for the monetary policies here and in the US. Investors are expected to trade cautiously while waiting for the Fed’s policy decision this week,” he said.

As for catalysts, according to Limlingan, cash remittances data from abroad to the Philippines is set to be released on June 17.

For fellow Asian Markets, all ended in the red as Japan went down 3.01 percent, China dropped 0.89 percent, Hong Kong plunged 3.39 percent, South Korea decreased by 3.52 percent, Vietnam shrank by 4.44 percent, Indonesia slipped by 1.29 percent, Thailand dipped by 1.99 percent and finally, Singapore descended by 1.33 percent.

Trading remained slow at the start of the week with net value turnover posting P5.12 billion, below the year-to-date average of P6.82 billion.

Foreigners were net sellers with net outflows amounting to P624.30 million.

All sectors were in the red led by the miners, shedding 2.64 percent.

Losers outnumbered gainers 146 to 43, while 39 securities remained unchanged.

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