Stock market seen gaining ground

TRADING volumes for the week will be thinned by today’s local elections but analysts expect the stock market to continue building from last week’s gains.

“[ W]e are seeing a lot of optimism as the index refuses to break below this 7, 500 support level,” Eagle Equities, Inc. research head Chris Mangun said.

Robust purchases of blue-chip stocks spurred last Friday’s gains, he noted, citing top gainers such as Ayala-led Globe Telecom and property developer SM Prime Holdings, Inc.

The Philippine Stock Exchange index (PSEi) capped last week by surging 2.39 percent on Friday, adding 181.11 points to close at 7,752.11. The broader all shares also climbed 1.71 percent or 79.24 points to 4,709.15.

The gain was attributed to Thursday’s announcement that the economy had expanded by a better-than-expected 6.8 percent in the first quarter and the Monetary Board’s decision to implement a 15-basis point interest rate hike — the first in over three years — to address rising inflation.

“If we continue to see buying pressure [this] week, then we may see the index test its next resistance at 7, 830,” Mangun said.

He also raised the possibility of the local market consolidating “between 8,500 and 8,700 as it builds momentum to test the next resistance.”

IB Gimenez Securities research head Joylin Telagen, however, said the market could continue to experience thin trading due to the barangay elections.

“[ V]olume improved to 5.6 [billion shares on Friday] but still short of [the year-to-date] average of 8 [billion],” she noted.