Stocks to trade sideways ahead of Fed minutes
THE MARKET is expected to continue trading sideways this week as investors search for catalysts, with focus turning to hints on the US Federal Reserve’s next move and the Trump administration’s reform plans.
Most sectors finished in positive territory, led by services which increased by 3%.
Losers trumped gainers 94 to 87 with a P7-billion value turnover last week.
Averaged net foreign outflow climbed to P1.3 billion.
“With concerns brewing on the capability of the current US administration to implement the tax reform overhaul, eyes are set on how the Fed will counter this hurdle in terms of monetary policies,” read the weekly report of online brokerage 2TradeAsia.com.
2TradeAsia.com said the minutes of the Fed’s March 14-15 meeting, due for release on Wednesday, will be in the spotlight this week, with investors watching out for clues on how the US central bank will move forward following last month’s rate increase.
Investors will also be watch out for US data on inflation and employment while also keeping an eye on developments in the United Kingdom following its filing of a formal notice to leave the European Union.
“The market is still poised to trade sideways as investors are in search for any catalysts to propel the market higher,” Luis A. Limlingan, managing director at Regina Capital Development Corp., said in a mobile message over the weekend.
2TradeAsia.com also noted that market players are also watching the selection process for the next Bangko Sentral ng Pilipinas (BSP) chief. The government plans to announce its next central bank governor in three or four weeks’ time, Finance Secretary Carlos G. Dominguez III told Reuters last Wednesday.
Speculation has been rife at to who will succeed BSP Governor Amando M. Tetangco, Jr. who is due to step down in July, after having completed the maximum allowed two terms.
Names that have been floated include BSP deputy governors Diwa C. Guinigundo and Nestor A. Espenilla, Jr., as well as former trade secretary and monetary board member Peter B. Favila.
“We have already initiated interviews with potential candidates,” Mr. Dominguez said, when asked if the government was making progress in selecting a new governor. “We are pretty much according to schedule and we should be making an announcement in three or four weeks’ time.”
President Rodrigo R. Duterte will make the appointment.
“The market would need to break away from its present sideways trend, which might gain positive traction as [US] economic stimulus measures are announced,” 2TradeAsia.com added, pegging resistance at 7,400 and support at 7,250. -- J.C. Lim with Reuters