Market may finally break past 8,000 this week
The stock market may try to break past the 8,000 barrier this week following last week’s strong performance, analysts said.
The stock market enjoyed strong days last week except at the tail end when some investors were spooked by news that shipbuilder Hanjin has gone bankrupt with loans of roughly $400 million owed to local banks.
Still, the benchmark Philippine Stock Exchange index (PSEi), the local stock market barometer, rallied by 1.84 percent week on week to settle at 7,904.09.
Traders said investors placed their bets on Philippine equities amid expectations of cooling inflation and Wall Street’s volatility.
“Investors are buying blue chips that will benefit from a possible reversal of foreign inflows and positioning in stocks that will gain as inflation eases,” said Jonathan Ravelas, chief market strategist at BDO.
However, during the latter part of the week on Friday, the market finished in the red. Some profit taking occurred toward the end of the trading week after local unit of shipbuilder Hanjin asked its creditors to restructure its more than $400 million debt.
Nevertheless, Ravelas said the week’s close at 7,904.09 means the market still has the momentum to try the 8,000 levels, as it already touched the 7,992.33 intra-week high.
Investors, he said, should look for another assault toward the 8,000 level. However, failure to clear the 8,000 level could trigger some profit taking back toward the 7,500 level.
In all, the market is likely to breach the 8,000 mark within the quarter, said Harry Liu, president of Summit Securities Inc.
He said this would have a lot to do with cooling inflation and the steady economic growth of both the US and the Philippines.
Last week’s turnover amounted to P43.22 billion, while foreign net buying was at P4.47 billion.
In all, the PSEi is currently up almost six percent for the month.
This week, the market can go either way, but breaching the 8,000 mark so soon may be too optimistic.
For F. Yap Securities, immediate support is seen at 7,700 to 7,800 and resistance at 8,000 to 8.050.
Piper Chaucer Tan of Philstocks Financials said the market may still continue its rally given the upside to Philippine shares which have been severely battered the past year.
“We are still upbeat and the 8,000 level might come sooner than later,” Tan said.