Market seen to continue moving up this week

Local shares, fresh from posting record highs last week, will continue to command the optimism of investors this week.

Key policy rates of the Bangko Sentral ng Pilipinas (BSP) will likely be kept low, boding well for the stock market.

“Having breached an intra-week high of 6,150, optimism in favor of Philippine shares will be supported, until industrialized markets heal from their fiscal deficit bruises,” said Freya Natividad, investment analyst at brokerage firm 2Trade-Asia.com.

“Pauses within an upward trending market would be an opportune time to position,” Natividad said.

Week-on-week, the bellwether Philippine Stock Exchange index gained 87.46 points or 1.45 percent to end the week at a new record high at 6,139.21, the eighth all-time high this year.

For the most part last week, the local stock market rode on the surge in Wall Street that benefited from encouraging jobs and housing data.

Closer to home, investors cheered news that China’s economy surprisingly picked up to 7.9 percent in the fourth quarter, beating analyst estimates, as exports and industrial output recovered.

For this week, the first rate setting meeting of the BSP’s Monetary Board will be the focus on the local front.

While monetary policies are appropriate, there is still a downward pressure for the interest rates especially compared with the country regional peers, Natividad said.

However, potential rate cuts might add pressure to the strong peso that is hurting exporters and families of overseas Filipinos.

For local stocks, Natividad said investors should accumulate on weaknesses.

“For now, portfolio allocation will be growth-selective, especially within the election, project bidding plus merger & acquisition season,” she said.

2Trade-Asia.com pegged the immediate support level at 6,050-6,100, with resistance at 6,200-6,300.