The Philippine Star

Stocks likely to con­sol­i­date at 8,000 mark

- By IRIS GONZALES

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.

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