THE LOCAL stock market is seen to sustain its upswing this week heading into the corporate earnings season alongside prospects of further monetary stimulus in the European Union (EU).
Last week, the Philippine Stock Exchange index (PSEi) gained 180.62 points or 2.56 percent to close at 7,236.38 on Friday after the European Central Bank hinted at fresh monetary stimulus.
This week, local stockbrokerage AB Capital Securities said investors would look forward to the start of the third-quarter earnings reporting season.
“Bullish sentiments from further EU stimulus pushed the PSEi higher on Friday to finally break above the resistance at 7,200,” the brokerage said. “The breakout from this level implies a possible short-term target of 7,800.”
The brokerage said the market’s immediate resistance would be at 7,400 while immediate support could be found at 7,200.
Apart from indications of EU stimulus, Banco de Oro Unibank’s chief strategist Jonathan Ravelas said rosy prospects of better local third-quarter earnings boosted the market last week.
“Chartwise, the week’s close at 7,236.38 encourages a test of the 7,300 levels,” Ravelas said. “A break above 7,300 levels could see a test of 7,500 and prompt profit-taking back to the 6,900-7,000 levels.” Doris Dumlao-Abadilla