Stock market: All eyes on US
Philippine Daily Inquirer
The stock market is expected to focus its attention on overseas developments, particularly the US budget deal negotiations, when the local bourse reopens after the New Year weekend break.
The Philippine Stock Exchange index ended 2012 with a bang on Friday, posting a 33-percent gain for the year. Week on week, however, the index declined by 11 points as the US “fiscal cliff” concerns added to profit-taking pressures.
According to Freya May Natividad of 2TradeAsia.com, local market players “will give more credence on overseas trends this week.”
She also said portfolio positioning for the first quarter may
be selective and likely veer toward growth stocks.
“Index issues might also take their boost from anticipation of credit rating upgrades this year,” Natividad said.
Immediate support is seen at 5,800, and resistance at 5,850-5,870.
Meanwhile, all eyes are now on the US Congress as it reconvenes to work on a budget deal.
There are indications that the summit may last until Jan. 2 to resolve the deadlock over the “fiscal cliff.”
“If no accord is agreed upon prior to deadline, tax filings for majority of US taxpayers may be delayed until late March, and this will push the US economy into a recession in the first half,” Natividad said.
Given this set of circumstances, “funds will favor high-yielding emerging markets, until risks within advanced economies ebb,” the analyst added.
The so-called US fiscal cliff refers to a series of mandated tax increases and budget cuts taking effect in 2013 that are seen harmful to the US economy.—Doris C. Dumlao
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Tags: forecasts , Philippines , stocks , US
