LOCAL SHARES are seen to trade sideways this week as trading is cut a day shorter due to the observance of All Saints’ Day on Friday.

The start of filing of quarterly reports by listed firms last week pulled the benchmark Philippine Stock Exchange index (PSEi) down 28.48 points or 0.35% to close at 7,922.50 on Friday.

But on a weekly basis, the main index was still on an upward path, closing 0.47% up to record its third straight week of gains.

Value turnover remained slim at P26.22 billion on Oct. 21-25, gaining slightly from P25.08 billion the week prior.

“The general investor sentiment has remained very cautious as the appetite for equities continues to dwindle by the day,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in a market note about last week’s trading.

He said the central bank’s decision on Thursday to cut the reserve ratio requirement for banks by another 100 basis points will free up almost P110 billion in cash, and should therefore be “extremely good for our economy.” However, he said “the market had almost no reaction,” showing that “retail investors continue to speculate on second and third liners.”

For the coming week, Mr. Mangun said he expects muted trading because of the holiday on Nov. 1.

“(The PSEi) may inch higher potentially testing 8,000, However, we may see an increase in selling pressure as investors take some risk off the table ahead of the holiday,” he said.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan gave the same resistance level, saying it will be heavy approaching the 8,000 mark.

“Market will probably react to window dressing since shortened week. Investors will also be keeping an eye out on the outcome of the latest (Federal Open Market Committee) meeting during the middle of the week,” he said in a mobile message.

For Diversified Securities, Inc. Equity Trader Aniceto K. Pangan, the market is expected to consolidate this week “depending on the progress of the US-China trade talks negotiation, as well as the Brexit deal.”

The United States and China are still working to finalize its “phase one” deal in an effort to end its almost two-year trade war, while United Kingdom lives a few more days as part of the European Union after being granted a Brexit deadline extension last week.

Mr. Mangun also said the US Federal Reserve’s decision on monetary policy this week will likely impact the stock market.

Regina Capital’s Mr. Limlingan added that the release of third-quarter earnings reports may drive investors to be stock-specific for the coming week.

But Mr. Mangun noted, “the market remains in limbo, trading sideways with no real direction. Investors are still trading solely on the sentiment and not looking at fundamentals at all.”

“We are still expecting a big move in the coming months. The question on everyone’s mind is whether we will be seeing new highs or new multi-year lows,” Mr. Mangun said. — Denise A. Valdez

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