Local shares to sustain rally on positive sentiment

STOCKS are expected to continue their rally this week as the market reopens this week amid optimism about the country’s economic growth and traders’ anticipation of first quarter results of listed companies.

The Philippine Stock Exchange index rallied within the 7,600 levels during the shortened trading week, hitting multi-month highs. Last Wednesday, the bellwether index closed at 7,629.64, up from the previous day’s 7,601.40 and also higher than its finish of 7,583.75 on April 7.

Local equities defied the performances of other markets last week: the Dow Jones Industrial Average slipped 138.61 points or 0.67% at 20,453.25, the S& P 500 fell 15.98 points or 0.68% at 2,328.95, and the Hang Seng Index dropped 51.84 points or 0.21% at 24,261.66.

For the coming days, analysts said last week’s run could be sustained due to the market’s positive trajectory.

“Post-Easter rallies run high, especially after our local bourse has shown signs of resurgence following its breakout from its sideways trend since January. Funds have shifted back to Philippine shores, backed by international agencies’ encouraging outlook on the economy’s fundamentals. Optimism may soon build in the coming months, ahead of 1Q (first quarter) interim announcements from listed shares,” according to online brokerage 2TradeAsia. com.

“It will become more aggressive most probably towards the end of the first half of the year. Reports are coming out. People right now are accumulating,” Summit Securities President Harry G. Liu said in a phone interview last week.

“Second quarter will be about accumulation and consolidation, waiting for more positive news from the company’s reports,” Mr. Liu added.

Pronouncements from world leaders and businessmen in the upcoming International Monetary Fund ( IMF) meeting on April 21 and Organization of the Petroleum Exporting Companies Ministers’ Meeting on April 22 may likewise affect trading, as they discuss rising tensions in the global scene today.

The IMF is expected to issue warnings on US President Donald J. Trump’s protectionist policies, with the multilateral lender’s Managing Director Christine Lagarde saying that putting up barriers to trade would be a selfinflicted wound to an improving global economy.

Locally, Summit’s Mr. Liu said the strength of the economy is lifting the market so far, despite uncertainties in the country’s political situation. “Our local market seems to be accepting any political situation that we have right now. For the economic situation it seems to be improving, more infrastructure projects are on the way, companies are growing.”

“Focus on pluses as long-term players seize on weakness to reposition excess funds,” according to 2TradeAsia.com.

This week, the immediate support is pegged at 7,600, with resistance seen within the range of 7,700 and 7,730. •