Stocks to consolidate amid lack of major drivers
STOCKS may move sideways this week as the market continues to consolidate and in the absence of major catalysts.
The broader all-shares index also gained 0.92% on a weekly basis to finish at 4,735.12. All sectors eked out some gains, led by industrial stocks’ week-on-week climb of 1.61% to 11,139.92.
Property stocks followed with a rise of 1.23% to 3,651.28. Financial issues were also strong as they gained 1.18% to 1,960.90. The rest of the sectors ended the week positively, although their rise were less than a percentage point.
On average, the daily turnover for the week slipped to P6.09 billion, down 27% from P8.37 billion during the June 26-30 week.
Foreigners sold more stocks than they bought, resulting in a net selling of P269.93 million worth of shares, a reversal of the previous week’s net buying of P191.46 million.
“Sessions trailed sideways, with the PSEi range-bound at 7,734-7,894,” said 2TradeAsia.com.
For this week, Harry G. Liu, president of Summit Securities, Inc., said he expects the market to be “a bit on an upward rally” and maintain its consolidation unless a positive news sets in to serve as catalyst to lift stocks higher. He pegged the PSEi’s support at 7,700 and its resistance at 8,000.
Mr. Liu noted that fundamental stories to watch out for include the forthcoming opening of the Philippine Congress’ second session, the government’s tax reform packages, the situation in Marawi City and the discussions of the world’s biggest economies.
Miguel A. Agarao, vice-president of Philequity Management, Inc. said: “I expect it to consolidate between 7,700 and 8,000 in the near term.”
2TradeAsia.com, the online arm of F. Yap Securities, Inc. described the market’s recent performance as a “time to shop.”
“At this stage, fund managers are likely to review catalysts that could push the PSEi out of the 8,000 psychological resistance barrier,” it said.
“The sideways movement would be an opportune time to accumulate selectively on dips,” it added.
It placed the PSEi’s immediate support at 7,800 and resistance at 7,950-8,000.
Wall Street stocks closed on a high note Friday, with the S&P 500 index posting its best gain in six sessions on the heels of a US payrolls report that gave investors more confidence in the strength of the US economy.
The economy added 222,000 jobs last month, US Labor Department data showed, putting the Federal Reserve on track to raise interest rates once more this year. However, muted wage growth may give the Fed room to pause if need be. -- Victor V. Saulon with Reuters