Stocks expected to recover this week

Local stocks are expected to recover this week from last week’s sluggish performance as investors shift their attention to the country’s potentially strong fourth quarter economic expansion.

“The market has been swayed by global news the past weeks, heavily on UK’s hard Brexit concerns and Donald Trump’s inauguration. With no major local headlines in place yet, the mart might begin to factor-in the country’s gross domestic product (GDP) report on Thursday to manage expectations for this year’s performance, and realign their portfolios,” the equity research team at 2tradeasia.com said.

The Philippine Stock Exchange index (PSEi) closed in the red last week at 7,232.66. Week-on-week, the PSEi was lower 0.08 percent with slightly weaker turnover value of P5.09 billion.

Net foreign outflows stood at P158 million.

Last week’s market performance was mainly dictated by foreign events in line with the inauguration of US President Donald Trump.

With Trump officially sworn into office as the 45th US president last Friday, analysts said investors could now turn their attention to local events while continuously keeping an eye on US developments.

“Moreover, the National Economic and Development Authority will be submitting their development plan, which hopefully could shed more light on the administration’s growth angle in the coming years. Consequently, Trump and Duterte’s policies seem to mirror similar sentiment when it comes to economic priorities, which could definitely level their playing field to adopt fair and marketbased trading conditions,” 2tradeasia.com said.

For this week, the local market is expected to move sideways but with a positive bias.

Immediate support is placed at 7,150, while resistance is at 7,300.