PSEi seen retesting 7,000

THE LOCAL stock barometer is seen retesting the 7,000 mark this week as investors digest more local corporate earnings reports alongside improved risk appetite overseas.

Last week, the Philippine Stock Exchange index (PSEi) gained 127.77 points or 1.9 percent to close at 6,899.07. It hovered closer to 7,000 mark in the last two days before succumbing to profit-taking.

“Chartwise, the week’s close at 6,899.07 continues to suggest the market will range the 6,800-7,000 levels in the near term,” Banco de Oro Unibank chief strategist Jonathan Ravelas said. “The market could still retry the 7,000 levels, a break of which could try the 7,350-7,370.”

Last week, Ravelas said the local stock market had taken its cue from Wall Street after rosy US factory and construction data lifted investor sentiments about the recovery of the American economy.

“However, the release of the February domestic inflation, coming in lower than expected, prompted investors to lock in their gains as the market failed to break the 7,000 levels,” he said.

On Friday, the US Labor Department reported that nonfarm payrolls for February expanded by 242,000 while 30,000 more jobs were added in December and January than previously reported. The jobless ratio was kept at an eight-year low of 4.9 percent despite an expansion of the labor pool.

The Dow Jones industrial index added 62.87 points or 0.37 percent to close at 17,006.77 on Friday while stock futures were positive for US and Asia-Pacific markets.

Meanwhile, the peso gained against the greenback for the second week in a row. BDO’s Ravelas cited profit-taking in long US dollar trades in emerging Asia currencies, causing the local currency to close the week at 46.945, better than last week’s 47.515 against the greenback.

“Other factors that led to the local currency’s gain are the portfolio flows that went to the equity market amounting to $38.2 million,” he said.

Chartwise, Ravelas said the local currency might further test 46.70-46.80 in the near-term. Trading range for the week ahead was seen at the 46.90-47.10 to $1. Doris Dumlao-Abadilla