Upward bias seen as firms report earnings

The local stock market is expected to trade with an upward bias this week as first-half corporate earnings start coming in, analysts said.

“We expect the market to start trading with an upward bias, looking to break the 6,400 resistance level, as first-half earnings results have so far shown good results underpinned by the economic reopening trend amid a challenging economic environment in the second quarter of 2022,” said Unicapital Securities.

Last week, the benchmark Philippine Stock Exchange index (PSEi) closed 52 points higher at 6,315, up 0.84 percent.

Stock trading portal 2TradeAsia.com noted the same thing, saying that the focus of investors in the coming days would be the first-half corporate profit results.

It sees immediate support at 6,100 to 6,200, with resistance at 6,450 to 6,550.

“Preliminary indications on interim results from select large caps have been encouraging, especially on quarter-onquarter trend or the second quarter versus the first quarter,” 2TradeAsia said.

However, it also noted that the month marks the start of the Chinese Ghost Festival. Thus, market turnover may be light.

“Contrarians, meanwhile, are likely to prowl on the market’s oversold state with P/Es already trading cheaply at 13 times based on 2022 estimates,” it said, adding that the lull presents investors opportunities to accumulate, especially for stocks with solid prospects.

Commenting on other factors that may affect the market, 2TradeAsia said that there are indications that there would be less aggressive interest rate hikes from the Bangko Sentral ng Pilipinas.

The next BSP rate-setting meeting is on Aug. 18, with possibly a 25- to 50-basispoint hike in local policy rates after the surprise 75 bps hike last July 14.

“This would give enough reprieve for interest rate-sensitive sectors, especially those aiming for improved sales take-up for the remainder of the year, such as property shares,” 2TradeAsia said.