Philippine stocks are expected to move sideways this week, with possible quarter-end window-dressing in the next few days, AB Capital Securities Inc. said in its weekly outlook report.
The expectations come as the benchmark Philippine Stock Exchange index (PSEi) dipped 0.36 percent to 7,261.3 last week, after hitting an intra-day high above 7,400.
The index subsequently pulled back on profit-taking and as the Asian Development Bank cut the country’s 2014 growth forecast to 6.2 percent from 6.4 percent and for 2015, to 6.4 percent from 6.7 percent.
“We expect the PSEi to course sideways [this] week, with a wider trading band to allow for a possible quarter-end window-dressing early [in the] week as well as profit-taking after the climb,” AB Capital equities analyst Joyce Anne J. Ramos said in the report.
She pegged the psychological resistance level at 7,413 with major support at 7,200. BDO Unibank Inc. chief strategist Jonathan Ravelas, in a tweet last week, noted that the 7,200 was crucial and a dip below this could “retest” the 7,000 level.
“We advise investors to be cautious about their positioning—an entry near the 7,200 level is an opportunity for bargain-hunting,” Ramos added.
She said investors would also be looking toward economic indicators as well as geopolitical developments abroad for the coming week.
On tap are China’s HSBC Final Manufacturing PMI and US’ ISM Manufacturing PMI, non-farm employment change and unemployment rate.
“Developments regarding the tension between Russia and Ukraine as well as about Iraq Prime Minister Haider Al-Abadi’s warning to US and Paris about a possible attack on their subway system could also be a determinant of the index’s direction,” she added. Miguel R. Camus