The local stock market weakened last week after gaining for three straight weeks, following the latest changes in the MSCI index - a global benchmark in equities trading.

The main 30-company Philippine Stock Exchange index (PSEi) closed the week at 6,578.15, down by 1.6 percent week on week.

However, net foreign selling at the local stock market narrowed to $12.4 million compared to $42.7 million the previous week.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the PSEi edged lower after a similar downward correction in most US stock markets.

Last Friday, Wall Street fell slightly on still lingering inflation concerns.

Moving forward, Juan Paolo Colet, managing director of China Bank Capital Corp., said the index would attempt to recover the 6,600 level, and a failure to do so could lead to a retest of the 6,500 territory where bargain hunting may emerge.

Last week's market slide sets the stage for choppy trading in the next several days as investors weigh the latest MSCI rebalancing, the interest rate pronouncements of the Bangko Sentral ng Pilipinas (BSP), and risks of a US debt ceiling impasse, he also said.

'With the first quarter earnings season practically over and the market largely expecting the Monetary Board to hold its key policy rate at 6.25 percent, there is not much in the way of news flows that can drive a sustainable rally this week,' Colet said.

While investors would certainly welcome a strong indication of an end to the BSP rate hike cycle and a path for rate cuts in the second half of the year, it is likely for central bank policymakers to be reserved in their outlook until they see a continued drop in inflation, he added.


Copyright © 2022 PhilSTAR Daily, Inc Provided by SyndiGate Media Inc. (