PSEI to test 7,300 level this wk

The continuous flow of funds into the stock market will allow the bellwether index to stay around the 7,200 level, with possible testing of the 7,300 mark this week.

“Sentiment will remain afloat following regional central bankers’ move to relax key monetary policies, on top of continued support for monthly bond purchases,” said Freya Natividad, investment analyst at brokerage firm 2Trade-Asia.com.

“With the added funds flowing into capital markets, fund managers are widely-expected to continue their search for higher yielding assets for the longterm,” she said.

Global fund managers are continuously pouring capital into emerging markets like the Philippines in search of higher yields.

Week-on-week, the Philippine Stock Exchange index (PSEi) gained 0.65 percent or 47.04 points to close at 7,262.38, marking the 29th time the main index posted a record high this year.

For Jonathan Ravelas, chief market strategist at BDO Unibank Inc., the market is still poised to see the 7,300 levels.

“But [the market] could be vulnerable to profit taking near the top,” Ravelas said.

“Participants will re-check the PSEi’s staying power above the 7,200 level this week, trailing progression from the peaceful conduct of the local and national elections,” Natividad said.

Some investors will likely reposition ahead of an anticipated rally back to the previous intraday high at 7,284, Natividad said.

2TradeAsia pegged the immediate support at 7,200-7,230 and resistance at 7,280-7,350.

An added push might also come from market abroad.

On Friday, Wall Street rose anew driven by the rally in several small cap companies.

The Dow Jones industrial average gained 0.2 percent or 35.87 points to 15,118.49 while the broader Standard & Poor’s 500 index added 0.4 percent or 7.03 points to 1,633.70.

Natividad said advanced economies are likely to spur growth this year through monetary measures.