MANILA, Philippines - It’s still the same old story for the stock market this week with the main composite index seen consolidating below the 4,180 level as investors take a wait and see stance on what kind of a solution the Sunday European leaders meeting would bring.
Last week, the PSEi inched up 0.32 percent to 4,166.60, mainly driven by third tier stocks which were mostly speculative.
AB Capital said the market will likely stay within range as investors await the meeting of European leaders to resolve the region’s debt problems.
“With all the volatility and emotions on the uncertainties abroad plus the outcome on this weekend’s EU meeting, the PSEi may just keep consolidating until sentiments and foreign markets improve,” AB Capital Securities said in its weekly market report.
“Since there is still no clear policy uniting Germany and France on how to solve the debt crisis, we just have to wait for this Sunday’s meeting of EU leaders as they strike a resolution to this problem. For now, some bargain stocks seem to be laggards unable to make a solid gain. Based on historical performances, we may see some price action sooner than expected since the last three months of the year are usually where the big price action commence,” AB Capital Securities added.
The market’s ascent was also attributed positive developments which include the rebound of copper and gold, the parliamentary vote on a new round of austerity for Greece, the agreement of European policy makers of releasing $1.3 trillion in funds.
The most-active US gold futures contract rose more than one percent to $1,630.9 an ounce Friday, following gains in spot prices, as arbitrage buying from the Shanghai market helped prices rebound from a decline of more than one percent in the previous session.
Among the stocks that had a good run last week were IPVG Corp on rumors it would be taken over by port king Enrique RAzon, Alliance Global Inc., which rose 7.2 percent, Megaworld (12.3 percent), URC (4.4 percent), and SM Investments Corp. (3.4 percent).