PSEi may move sideways due to profit taking
PHILIPPINE STOCKS are expected to move sideways this week as investors book profits after the market’s seven-week rally.
“The bellwether index dropped by as low as 113 points after Philippine inflation heated anew in February, but fresh buying resumed near the weekend,” online brokerage 2TradeAsia.com said in a market note.
On Friday, the benchmark Philippine Stock Exchange index (PSEi) rose by 1.53% or 104.87 points to close at 6,942.21. The broader all-share index gained 0.97% or 34.92 points to 3,602.81. Week on week, the PSEi added 0.33% or 22.62 points.
Philippine inflation quickened to 3.4% in February from 2.8% a month earlier due to higher food prices.
The local bourse could move sideways this week due to profittaking, Japhet Louis O. Tantiangco, a senior research analyst at Philstocks Financial, Inc. said in a Viber message. “With the sevenweek rally, we expect profit-taking pressures to be present. Still, we expect positive sentiment toward 2023 corporate results to continue providing support to the bourse.”
Wall Street’s record performance, if it continues, is also expected to spur the local market, he added.
The local market’s movement would depend on the latest inflation figures from the United States, due on March 12, Juan Paolo E. Colet, managing director at China Bank Capital Corp., said in a Viber message.
“Our market is poised for another attempt to close above 7,000, but whether it finally succeeds in overcoming the strong resistance at that level will depend largely on the US February consumer price index,” he added.
“How US equity markets react to the inflation report will influence the direction of the local stock index,” Mr. Colet said. “If we see data that bolster bullish bets of a Federal Reserve policy rate cut in June, then our market will likely benefit from risk-on sentiment and move higher this week.”
US inflation slowed to 3.1% in January from 3.4% in December.
Meanwhile, 2TradeAsia put the market’s support this week at 6,800 and resistance at 7,000.
“The 7,000 zone has so far been elusive, with recent sessions characterized by long wicks signaling strong selling pressure up top, although Friday’s technical confirmation has brought nearterm technical relief,” it said.
Mr. Tantiangco put the market’s support at 6,700 and resistance at 7,000 points. —