PSEi seen hitting new highs

The local stock market, which has been on a four-day winning streak, is on holiday break today (Monday) in celebration of National Heroes Day.

During last week’s four trading sessions, the Philippine Stock Exchange Index (PSEi) racked up 124.58 points or 1.78 percent to close at 7,133.09 while the broader all-shares index was up 49.23 points or 1.18 percent.

On Friday, which was also the last trading day of the “ghost month” period, a string of positive US economic data alongside easing political tension in Ukraine allowed the PSEi to close above 7,100 for the first time. The market is now trading at its highest level for 2014 and moving toward the all-time high of 7,400 seen early last year.

“Chartwise, the index is seen to trade between the 7,000-7,200 range [this week]. Note that the market usually struggles once it hits a major resistance, making the current level susceptible to profit-taking,” said Banco de Oro Unibank Jonathan Ravelas.

“Should there be a solid break above 7,200, however, we can expect a test of the 7,400 levels,” he said.

Meanwhile, the peso last week depreciated alongside regional currencies after US Federal Reserve minutes showed that faster convergence could lead to earlier rate increases, bolstering demand for the greenback, Ravelas said.

The peso closed last week at 43.835, weaker than the 43.67:$1 a week ago.

Ravelas said the peso would likely range between 43.60 and 43.90 this week.

“A break above the 44 level could retest 44.50:$1. Should this happen, our yearend target of 43.50 could be challenged,” he said. Doris C. Dumlao