Index seen retesting 9000 mark

The local stock market barometer may get back to the 9,000 level in the near term, possibly this week, traders said.

Last week’s close at 8,810.75 suggests that the benchmark Philippine Stock Exchange index (PSEi) will range between the 8,600 and 9,000 levels in the near term.

“Immediate support and resistance is seen at 8,500 and 9,100 levels, respectively,” said Jonathan Ravelas, market strategist at BDO.

Last week, the PSEi succumbed to profittaking after a global bond selloff which caused the 10-year US treasury yield to rise to a four-year high of 2.80 percent compared to 2.406 percent at the start of the year.

“This soured investors’ risk appetite. As a result, the local bourse fell by 2.55 percent week-on-week to 8,810.75. It hit an intra-week low of 8,721.85. This came after the market printed a new record high at 9,078.37,” Ravelas said.

Noel Medina, research and finance analyst at HDI Securities, said some market investors indeed realized that recent highs were not sustainable.

“The market had been overwhelmed by bears who realized that the recent recordhigh remains unsustainable due to the absence of a catalyst that can prove otherwise,” Medina said.

Nevertheless, Chris Mangun, head of research at Eagle Equities Inc., said the market was off to a good start this year, noting that it’s been a while since the market started the year at an all-time high.

“We start 2018 in uncharted territory as we closed at a new all-time high last week. The last time this happened was in 2015 when the index was around the 7,250 area. In 2016 and 2017 we started the year at the bottom and saw a boom in January through April. Since we are starting at the top this year, I think we will have a slower up take than the previous years as investors are still digesting the gains of 2017,” Mangun said.

He said the market may continue to go up but at the same time he noted that a correction may happen soon.

“We may see more gains in the weeks to come but a correction is due anytime soon. Even though we may start the year slower, I am still very positive that 2018 will be a year of hitting newer highs as the government goes into full force with its Build Build Build program and with the new tax-reform bill to take effect on Jan. 1, millions of Filipinos will be seeing a huge decrease in income taxes and as a result we may see more funds flow into the market,” Mangun said.

With the momentum, the market may possibly reach 10,000 by the end of next year.