The bellwether Philippine Stock Exchange Index is expected to test the 8,000-point level this week as foreign funds are expected to flow back to emerging markets, including the Philippines.
Analysts said the local market would also benefit from the rally of global equities, which is being fueled by s possible win-all pact deal on the US-China trade negotiations and Federal Reserve’s dovish view on interest rate hikes.
“PSEi at 7,904 signals the market still has the momentum to try the 8,000 levels. Look for another assault towards the 8,000 level,” BDO Unibank chief investment strategist Jonathan Ravelas said.
“However, failure to clear the 8,000 levels could trigger some profit taking back towards the 7,500/7,800 levels,” he added.
Other analysts said the Friday’s market decline would also provide investors a breather to help them reposition anew, especially on sectors that are expected to perform well this year.
The PSEi last week sustained its upward momentum closing at 7,904, up 1.84 percent from the previous week’s close, even after Friday’s decline as a result of the Hanjin debt issue that affected the banking sector.
The All Shares Index rose 1.7 percent to close to 4,730.
Except for the financials and the mining and oil index, which fell 2.28 percent and 1.46 percent, respectively all major counters ended in the green last week.
Overseas investors were net buyers for the week at P4.48 billion, while the average daily value traded stood at P8.6 billion, up from the previous week’s average of P6.5 billion.
Weekly top price gainers were Lopez Corp., which jumped 13.6 percent to P4.66; JG Summit Holdings Inc., which surged 8.6 percent to P64.50; and Alliance Global Group Inc., which advanced 8.3 percent to P12.78.
Weekly top price losers were Rizal Commercial Banking Corp., which declined 8.2 percent to P26.40; Metropolitan Bank & Trust Co., which went dropped 7.8 percent to P77.95; and Filinvest Development Corp., which lost 4.9 percent to P12.80.
Stock markets in Europe and the United States, meanwhile, slipped on Friday after several days of gains as investors took a breather in the absence of fresh news on trade talks between Beijing and Washington.
Earlier, Asian markets ended the week mostly on a higher note.
Key European markets were as much as half a percent lower at the close, while Wall Street finished a sleepy session marginally lower.
“US stocks are lower for the first day this week, paring a third-consecutive weekly advance that has come from lingering trade optimism and cooled concerns regarding the Fed making a policy mistake,” said analysts at Charles Schwab.
“Equities are slipping amid likely caution ahead of the ramp up of earnings season that coincided with the Q4 market tumult,” they said.
But analysts also said that the first full trading week of 2019 showed a solid performance after a tumultuous month of December for equities.
“Despite a lackluster end to the week, 2019 has managed to get off to a decent start despite equity markets finishing 2018 very much on the back foot,” said Michael Hewson, chief market analyst at CMC Markets UK. With AFP