GDP, earnings in play as PSEi on upward bias
The benchmark Philippine Stock Exchange index (PSEi) still gained for the third straight week, closing at 6,405, or 89.57 points (1.4 percent) higher last Friday, even as it snapped a three-day rally to finish lower than Thursday’s close.
Analysts mainly attributed the decline last Friday to the higher-than-expected inflation of 6.4 percent in July, up from 6.1 percent in June and the highest in nearly four years.
But Unicapital Securities Research said it expects the main index to continue climbing above the 6,400 level toward the end of the earnings season.
It added that investors would keep a close watch on the second-quarter gross domestic product (GDP) data to be released this week.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said he expects the next resistance for the PSEi at 6,500 to 6,600 while immediate support at 6,100 to 6,200.
He said while there are geopolitical uncertainties, such as China firing missiles over Taiwan for the first time during military drills after US House Speaker Nancy Pelosi’s visit to Taiwan last week, strong corporate earnings results have encouraged investors to stay in the market last week.
“Offsetting positive factors include generally better corporate earnings results recently that help support valuations of some listed companies as well as the sharp decline in global oil prices recently to new six-month lows, with the benchmark Nymex crude oil price at $90 per barrel levels versus $92 at the start of the Russia-Ukraine conflict,” he said.
This could mean more rollbacks in local fuel pump prices in the coming days.
“As the index seemingly moves from strength to strength, be reminded that there are timing differentials to macro-events, earnings and asset prices while this makes market diligence blurry, this opens opportunities to trade oversold, but high-quality securities. Aim for hopeful-but informed-farsightedness. Immediate support is 6,200, resistance at 6,500,” said 2TradeAsia in a commentary.