The local stock market is seen consolidating this week while awaiting fresh catalysts from the first-quarter corporate earnings reporting season.
Last week, the main-share Philippine Stock Exchange index (PSEi) rose by 57.87 points or 0.87 percent week-on-week to close at 6,742.97.
“It looks like there will be a correction. There’s need for some correction,” said Joseph Roxas, president of Eagle Equities Inc.
But Roxas said investor sentiment remained buoyant especially as the US Federal Reserve, while already tapering its monetary stimulus, was not likely to increase interest rates too soon.
The “sell in May and go away” phenomenon in US equities, Roxas said, might not necessarily apply to the Philippines this month. Last year, this “May” phenomenon had an effect locally because the US Fed had then first announced its tapering policy. This has been mostly priced in, Roxas said.
Banco de Oro strategist Jonathan Ravelas noted that the index managed to bounce back to the 6,700 level after testing the 6,600 support. “Should the 6,700 level hold, expect the index to retest the recent high of 6,815,” he said.
Joyce Ann Ramos, an analyst at AB Capital Securities, said that from a technical perspective, the index was moving midway through its four-month upward trend channel, having more room to climb to its resistance level at 6,830, and slide to support level at 6,600. Doris C. Dumlao