PHILIPPINE STOCKS may rise this week as investors hunt for bargains while awaiting more corporate results and global trade developments.
On Friday, the Philippine Stock Exchange index (PSEi) inched down by 0.02% or 1.33 points to end at 6,465.53, while the broader all shares index rose by 0.02% or 0.93 point to 3,769.37.
Week on week, the PSEi climbed by 0.11% or 7.33 points from its 6,458.20 finish on May 9.
“Local equities made a short trip above 6,500 [last] week post-midterm elections, but succumbed to profit taking late in the week. With the election now in the rearview, the market shifts its focus back to fundamentals,” online brokerage 2TradeAsia.com said in a market note.
“The local market is already on a six-week winning streak, with last week’s rise attributed mainly to the progress between the US and China’s trade relations. To add, the market has gone past and has so far managed to maintain its position above its 200-day exponential moving average. Noticeable, however, are the thinning gains of the market as selling pressure strengthens amid investor caution,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.
On Friday, US President Donald J. Trump announced that US officials will send letters to countries over the next two to three weeks regarding what they will be paying to conduct business in the US.
The announcement came as the US and China reached a 90-day truce on the trade war. The US will cut tariffs imposed on Chinese imports to 30% from 145% while China will slash duties on US imports to 10% from 125%.
Mr. Tantiangco said with the market still undervalued despite its recent rise, investors may look for bargains this week.
“However, investors are expected to look for catalysts that would compel them to get into the bourse. Investors are still expected to go through first quarter corporate results. Investors are also expected to watch out for developments on the global trade front, with signs of progress on negotiations with the US expected to fuel positive sentiment in the market,” he said.
Mr. Tantiangco placed the PSEi’s support at 6,400 and resistance at 6,600.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in an e-mail that the benchmark index’s immediate minor support is 6,290-6,405 and resistance is at 6,591.94.
For its part, 2TradeAsia.com pegged the PSEi’s immediate support at 6,300 and resistance at 6,650.
“First quarter earnings remain the primary guidepost for midyear positioning: expect margin trends and forward guidance to calibrate exposure, but also sector stories as consumption momentum from the campaign season tapers and public spending reopens post-elections,” it said. “High-quality names showing margin resilience plus strong capital discipline… are still underscored, amid the search for new catalysts in the short-term beyond earnings momentum and residual trade headlines.” — Revin Mikhael D. Ochave
