Stocks likely to correct ahead of Holy Week break
THE MARKET is expected to move sideways in the last trading days before the Holy Week break, with the local index still poised to stay within the 7,500 level.
The broader all-shares index likewise surged by 2.83% to 4,524.16 from its close of 4,399.71 a week prior.
The 30-member index breached the 7,600 mark last Friday as it touched an intraday high of 7,667.63, driven by positive bets on the country’s economic growth for the first quarter following bullish comments by economic managers and positive data released last week.
Analysts expect optimism on the country’s economic growth to give the market enough boost for the shortened trading week, but also advised traders to be cautious on their next move as geopolitical conflicts offshore, particularly developments between US and Syria following the former’s missile attack on Friday, may affect investor sentiment.
Local financial markets will be closed on April 13-14 in observance of Maundy Thursday and Good Friday.
“Technically, market is building up the term trend to be positive, but due to the Holy Week coming up, we might see some technical correction. But I think the week will be more of a sideways behavior,” Summit Securities, Inc. President Harry G. Liu said in a text message over the weekend.
“Given a shortened three-day trading week, focus will center on the PSEi’s ability to keep its poise above 7,500. We expect local participation to dominate as most fund managers take their Lenten break,” according to the weekly outlook of online brokerage 2TradeAsia.com
“The latest reading in the Nikkei Philippines Manufacturing Purchasing Managers’ Index at 53.8 in March (from February’s 53.6) may indicate sequel trends in consumer spending and broadly support GDP (gross domestic product) growth for the initial quarter this year. While inflation ticked higher last month, it is worth to note consumer prices are still within single-digit, with no near-term threat for the economy to overheat in 1H17 (first half 2017),” 2TradeAsia.com said.
The US nonfarm payrolls report released last Friday could also be a market driver this week, Regina Capital Development Corp. Managing Director Luis A. Limlingan said.
US nonfarm payrolls increased by 98,000 jobs last month amid continued layoffs in the embattled retail sector, but a drop in the unemployment rate to a near 10-year low of 4.5% suggested labor market strength remained intact.
Summit Securities’ Mr. Liu said he expects the market to move sideways “as long as [there are no] big fundamental changes or local or global crisis.”
Immediate support for the PSEi this week is at 7,500, with resistance pegged within 7,650 to 7,670, 2TradeAsia.com said. -- A. B. Francia with Reuters