Market seen to consolidate

Local stocks are seen continuing to consolidate this week but a potential catalyst could be the release of the country’s first-quarter economic report card.

Last week, the main-share Philippine Stock Exchange index (PSEi) hit a new high and breached 6,900 but lost steam later during the week due to profit-taking. Week-on-week, it lost 0.09 percent at 6,811.33 on Friday.

“The market’s inability to break above the 6,900 levels raised valuation concerns as

news came out that one of the biggest funds in the local market started unloading,” said Jonathan Ravelas, chief strategist at Banco de Oro Unibank.

As the PSEi managed to stay above 6,800, Ravelas said the near-term bias would be for the index to retest the recent high of 6,906.

“A break below 6,800, however, could signal further losses toward 6,650-6,700,” he said.

Joseph Roxas, president of Eagle Equities Inc., said the market would still be in a consolidation mode, with support levels at 6,700 to 6,650 and resistance at 6,900.

It was possible that the index would pierce the 6,800 level due to profit-taking, Roxas said, but not necessarily for the whole week.

What could change the tone for the market, he said, would be the actual release of Philippine first-quarter GDP results on May 29.  Doris C. Dumlao