Market correction seen after a strong 2018 start
Shares price are expected to correct this week after a strong start last week that saw the index reaching the 8,800-point level.
Philstocks Financial research head Justino Calaycay said the market correction might occur anytime soon after the Philippine Stock Exchange Index opened with a bang last week.
Calaycay said the market sustained an upward momentum in the first week of 2018 in the absence of negative news during the first trading days of the new year.
But he expects the market to correct once the inflation rate numbers for January and February are out, taking into account the impact of the higher excise tax approved by the government.
Calaycay still sees the index reaching a high of between 10,700 and 11,000 points this year.
“If domestic risks are contained or do not roll out, the market’s overall sentiment will stay positive even ahead of the 2019 political exercise and the extended bull run,” Calaycay said.
“But risks also include rising inflation rate and a weakness in the current account as central banks in developed economies shift more toward tightening,” he added.
The PSEi opened the first trading week of 2018 with the a big jump, with the index surging 2.47 percent to 8,770 and the All Shares Index climbing 1.73 percent to 5,076.32.
Except for the services which dipped by 0.81 percent, all other sub-indices ended in the green, led by holding firms which rose 3.76 percent, property which advanced 2.97 percent and industrial gained 2.39 percent.
Foreign investors were net buyers by P730.2 million, while average daily value traded stood at P9 billion.
Weekly top price gainers were Universal Robina Corp., which increased 8.5 percent to P163.90, JG Summit Holdings Inc., which rose 8.1 percent to P77.95, and San Miguel Corp., which advanced 7.5 percent to P120.
Weekly top price losers, meanwhile, were First Gen Corp., which declined 5.2 percent to P16.12, Globe Telecom Inc. which dropped by 5 percent to P1,805 and Golden Haven Inc. which dipped 4.56 percent to P21.
Wall Street stocks, meanwhile, powered higher Friday with the Dow surging further above 25,000 points as bullish investors shrugged off a disappointing US jobs report.
The Dow Jones Industrial Average finished up 0.9 percent at 25,295.87, its third straight record and the second close above the 25,000 landmark.
The broad-based S&P 500 gained 0.7 percent to end at 2,743.15 and the tech-rich Nasdaq Composite Index advanced 0.8 percent to 7,136.56, both setting new closing records for the fourth straight day.
The US added just 148,000 jobs in December, the Labor Department reported, far below expectations, although unemployment held steady at its 17-year low of 4.1 percent.
The figures also lagged those in Thursday’s report by payroll firm ADP, which put private-sector job growth at 250,000 in the final month of the year.
But investors, who opened 2018 in a fever pitch to buy equities, were unfazed by the lackluster data, much as they have also overlooked any concerns about US-North Korea tensions or domestic political controversies. With AFP