The stock market is expected to sustain its rally this week on expectations the government will report a relatively low inflation rate for the month of January.
Arbee Lu, head of online trading on P2P Trade Online, said the market’s strong performance Friday when the benchmark index hit a new year-to-date and intraday high of 8,144, signaled a breakout for the PSEi.
“With our resistance at 8,100 broken, the next hurdle is at 8,500 (+4.9 percent away). Perhaps the dovish Fed coupled with optimism of a relatively low inflation figure next week helped drive the market,” Lu said.
The Bangko ng Sentral ng Pilipinas earlier said it expected inflation rate to have settle between 4.3 percent and 5.1 percent in January as consumer prices dropped sharply during the month.
Continued foreign buying was also supporting the market’s upward momentum.
“Foreign funds is the main driver in sustaining the 8,000 (point level), strongly backed by the US Federal Reserve on not rising federal fund rates,” Philstocks Inc. said
The Philippine Stock Exchange Index last week added 1.1 percent to close at 8,144.16, while the broader All Shares Index climbed 1.2 percent to 4,909.51.
Except for the property index which declined 0.19 percent, all major counters ended in green led by holding firms (+2/24 percent), financial (+1.62 percent), services (+1.59 percent) mining and oil (+1.1 percent) and industrial (+0.39 percent).
Foreign investors were net buyers for the week by P5.75 billion, while the average daily value traded stood at P9.35 billion from the previous week’s average of P6.8 billion.
Weekly top price gainers were Cemex Holdings Philippines Inc., which advanced 17.2 percent to P2.72, GT Capital Holdings Inc ., which climbed 9.7 percent to P1,119, and Bloomberry Resorts Corp., which rose 6.7 percent to P11.10.
Weekly top price losers were PAL Holdings Inc., which declined 6.7 percent to P13, ABS-CBN Corp., which fell 6.6 percent to P23.30, and Petron Corp., which slipped 3.9 percent to P7.49.
Global stocks, meanwhile, mostly rose Friday following strong US jobs data, though Wall Street’s rally showed signs of fatigue after the Dow finished its best January in 30 years.
US employers added 304,000 net new positions last month—the highest in nearly a year and almost double what economists had predicted—while growth in worker pay held steady above inflation, according to the government jobs report.
However, the unemployment rate ticked up to 4.0 percent, the highest in seven months, as the labor force expanded and as the US government was partially shut for five weeks, most of which fell in January.
James Knightley, chief international economist at Dutch bank ING, said the report “suggests that the US economy hasn’t been adversely impacted by the government shutdown in any meaningful way.”
After a choppy session, the Dow and S&P 500 finished with small gains, while the Nasdaq retreated modestly. With AFP