InterAksyon.com means BUSINESS
MANILA - Philippine share prices may likely trade within a range as the local equities market continues to seek guidance from developments in Greece and Spain.
Athens will be the focal point of investor sentiment as the Greek elections on June 17 may decide whether the country remains in the euro zone.
"The elections will likely keep the markets on its feet which would lead to more volatility over the near term," said Gregg Adrian Ilag of AB Capital Securites Inc.
While European concerns focus on whether Greece will comply with the conditions of two prior bailouts and stay in the region, Spain is slowly taking on the spotlight, said Jun Calaycay of Accord Capital Equities Corp.
Over the weekend, euro zone finance ministers agreed to lend Spain up to 100 billion euros to help its troubled banks, removing a huge cloud that has been hanging over financial markets.
This was after Fitch Ratings pulled Spain's credit grade three notches lower to BBB or just two levels above junk status.
"The shockwaves from Spain would be significant considering its size – twice the combined size of Greece, Ireland and Portugal. The three nations have so far received an aggregate 386 billion euros in loan pledges. A Spanish rescue bill is seen to require 350 billion euros," said Calaycay.
After its first interest rate cut since 2008, China reported that consumer prices rose the least in two years in May, but industrial output and retail sales trailed estimates.
The slowdown in China has fuelled worries that global growth is stalling as Greece teeters on the brink of a chaotic euro, Spain restores confidence in its banks, and US employment growth softens.
"The news front continues to be a mixed bag with recent developments lending a negative twist to trading emotion. Nevertheless, the optimism on the domestic economy, supported by a 6.4 percent first quarter GDP and 2.9 percent May inflation, keeps the long term investment outlook encouraging," Calaycay said.
Critical support line is defined at the 4,920 to 4,930 range with a break below this line likely to induce a technical sell-off that can pull the composite towards the 4,700-line, the analyst said.
On an industry level, the release of the much-delayed mining policy upon President Benigno Aquino III’s return from a state-visit to the United Kingdom and the US may encourage interest in the sector.
InterAksyon.com means BUSINESS
BUSINESS NEWS
