The Philippine Star
Stocks likely to consolidate at 8,000 mark
The Philippine Stock Exchange index (PSEi) may continue to consolidate up to the 8,000 level this week following a rally at the end of last week.
“The week’s close at 7,849.94 continues to highlight the market to consolidate within the 7,700 to 8,000 levels in the near-term, provided the 7,500 levels does not give way,” BDO Research said.
It expects the bounce to stretch towards the 7,900 to 8,000 levels in the near term.
Last week, the market barometer rallied by 1.89 percent week-on-week for the first time in four weeks to 7,849.94 due to optimism over US-China trade talks, which boosted investor sentiment toward risk assets.
Bargain hunting from local investors also help pushed the market higher.
Cristina Ulang, vice president of First Metro Investment Corp. (FMIC), said the market may continue to perform well this week.
“The market may sustain gains due to likely limited US-China trade pack but punctuated with profit taking as usual,” Ulang said.
Global equities markets also rallied as investors expressed optimism about the US-China trade talks that began last week.
This after President Trump announced a short-term deal that would scrap tariffs scheduledtobeimposedonChinesegoodsnextweek.
China, for its part, pledged to purchase more agricultural products from the US.
Christopher Mangun of AAA Securities, however, said the optimism over the trade talks in the US may be short-lived which means we may see the sentiment go sour again in the coming weeks.
“Investors are still trading on sentiment and because of this, we may not see a solid rally moving forward. Because of this, we have not talked about fundamentals in the last few months, although economic fundamentals remain extremely strong except for the GDP, which we believe, will not come in within the government’s target for the end of the year due to the unnecessary rate hikes that we saw last year and the budget impasse earlier this year which restricted government spending, unless we see a massive pick up in government and retail spending in the fourth quarter,” Mangun said.