The stock market may test the 7,000-point level this week after showing signs of recovery on a stable domestic economy.
But analysts said the market’s direction would still be driven by earnings results and developments overseas, which could trigger volatility in trading.
“Chartwise, the week’s close at 6,899.07 continues to suggest the market to range the 6,800–7,000 levels in the near-term. The market could still retry the 7,000 levels, a break of which could try the 7,350–7,370 levels,” BDO Unibank Inc chief investment strategist Jonathan Ravelas said.
F. Yap Securities Jason Escartin said while the PSEi showed signs of short-term recovery from January’s drop, external development should be considered on account of China’s economic transition, the volatility of the crude market and geopolitical tensions across the region.
“The trend is still below the PSEi’s 8,000 high with 6,900-7,000 a critical resistance zone for the index. With the upcoming political election, it would still be prudent to trade within range by positioning on lows,” Escartin said.
Listed companies that will report their 2015 financial performance include Ayala Corp., LT Group Inc. and Del Monte Pacific Ltd.
The bellwether PSEi last week advanced 1.89 percent to close at 6,899.07, while the broader All Shares Index gained 2.07 percent to 3,966.66.
The stock market reached a high of 6,988.68 last week, or close to the 7,000 level following the lead of Wall Street, after rosy US factory and construction data.
Except for the services index, which declined 8.44 percent, all other major indices ended on the positive led by holding companies (5.3 percent), property (4.78 percent), mining and oil (4.34 percent), industrial (2.66 percent) and financials (0.52 percent).
Foreign investors were net buyers for the week by P1.4 billion as total foreign buying amounted to P21.51 billion against total overseas selling of P21.11 billion.
Top gainers for the week were DoubleDragon Properties Corp., which rose 21.4 percent to P29.50; Bloomberry Resort Corp., which climbed 17.4 percent to P4.87; and Melco Crown (Philippines) Resorts Corp, which gained16.7 percent to P2.39.
One of the weekly top price losers was Philippine Long Distance Telephone Co., which declined 20.15 percent to 1,797 per share after saying it would pay special cash dividends this year and projecting a 20 percent year-on-year drop in 2016 core net income to P28 billion.