Share prices are expected to move higher during this shortened trading week after the market last week broke out of its recent sideways channel range.
Analysts said the traditional window dressing at the end of the month’s trading would also provide a boost to the market.
“With the index’s strong close today (Friday), its effectively broken out of its recent sideways channel range. Next resistance should be around the 7,430-7,480 area,” Papa Securities trader Gabriel Jose Perez said.
BDO Unibank Inc. chief investment strategist Jonathan Ravelas said the local investor sentiment had improved following the drop in global oil prices and improvement in emerging market currencies driven by the slight weakening of the greenback.
“This further strengthens the view that inflation could have peaked, thus causing investors to rush back into the market as valuations remain reasonable,” Ravelas said.
“The week’s close at 7,340.18 signals some room to further test the 7,500 levels in the near-term. Momentum is slowly accelerating and supportive of a bounce, a break above 7,500 levels could extend the rally towards the 7,800,” he added.
The Philippine Stock Exchange Index last week jumped 3.6 percent to close at 7,340.18, while the broader All Shares Index climbed 2.3 percent to 4,409.23.
Except for the mining and oil index, which dipped 6.43 percent, all major indices ended in the green led by financials (+4.65 percent), property (+4.31 percent), holding firms (+3.4 percent), services (+1.25 percent) and industrial (+1.04 percent).
Foreign investors were net buyers for the week by P9.8 billion, while the average daily value traded stood at P8.5 billion from last week’s P7.6 billion.
Weekly top price gainers were Security Bank Corp., which surged 16.3 percent to P162.80; Megaworld Corp., which rose 11.3 percent to P4.85; and Bank of the Philippine Islands, which advanced 6.3 percent to P94.50.
Weekly top price losers were PXP Energy Corp., which dropped 19.3 percent to P14.56; Cemex Holdings Philippines Inc., which slumped 17.1 percent to P1.65; and Robinsons Retail Holdings Inc., which declined 6.4 percent to P72.05.
Oil prices, meanwhile, slumped Friday to lows not seen since last year as concerns over high crude supplies and uncertain economic growth triggered massive selling.
The petroleum slump, which took major oil contracts down to their lowest level since October 2017, comes as oil output remains high in the United States, Russia and Saudi Arabia and as some forecasters have trimmed their outlook for global growth, due in part to the US-China trade fight.
US oil benchmark West Texas Intermediate dropped $4.21 to $50.42 a barrel for January delivery, a decline of 7.7 percent.
In London, Brent oil futures for January delivery, slid 6.1 percent to $58.80 per barrel.
“The truth of the matter remains that rising global crude supply coupled with worrying signs of slowing demand have written a recipe for disaster for the oil markets,” said Lukman Otunuga, a research analyst at FXTM.
Global stock markets were mixed, with major US indices retreating in part due to worries about lower oil prices and weak global growth. With AFP