[ANALYSIS] Every inch of the market’s climb is a battle now but may soon prove better

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In the meantime, take note of the coming Ghost Month

This is AI generated summarization, which may have errors. For context, always refer to the full article.Initially, it looks like every inch of the market’s climb is a battle now. But there is also a good chance that it may turn out better.

Things started to change by the month of March. The market started to slip. It closed lower at 6,903.53, down 0.6% or 41.18 points. Five of the six sector indices mirrored the market’s month-on-month decline with the Mining & Oil, Industrial, Holding Firms, Property, and Financials indices decreasing by 4.6%, 2.6%, 1.4%, 1.2%, and 0.7%, respectively. The loss, however, was not that big enough to significantly affect the market’s gains since the beginning of the year.

By this time, the market’s performance was reduced to only 3.9% or 250.45 points above its starting level at the start of the year. Responsible in the market’s decline came from the big losses suffered by the Property, Holding Firms, and Industrial sectors due to the continued selling stance of foreign investors.

Among the technical and fundamental factors that pulled down the market into negative territory all these times was mostly due to inflation jitters, here and abroad; sometimes it is additionally affected by ongoing geopolitical conflicts. Five, if not, all of the six counters of the market performed badly because of the net selling activities of foreign investors whose market participation at one time also rose abnormally high to 63.32%.

Looking back, the Philippine economy largely grew in 2023 due to the “resumption of in commercial activities, public infrastructure spending, and growth in digital financial services.” Going back to the study I mentioned, its first scenario projects that the economy will have a slower growth rate considering existing challenging conditions “such as declining trade and accelerated inflation which will force government regulators to “keep key policy rates high at about 6.5 percent and dampen private consumption, leading to slower long-term growth.” In this case, the market might remain to trade below 7,000.

 

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