LOCAL stocks are seen to consolidate this week while investors await the release of the second-quarter gross domestic product (GDP) report on Thursday.
The Philippine Stock Exchange index (PSEi) closed at 7,955.86 on Friday, flat from last week’s finish of 7,970.35.
“The market looks like it has hit an intermediate top at 8,118 back in July 22. For now, it looks like the market will consolidate between 7,930 and 8,065,” said PNB Securities president Manuel Lisbona.
A break below 7,930 could find the PSEi back to 7,810, Lisbona said.
“Recent released US retail data may be catalyst for a bounce as the data make a case for delaying a rate hike by the Fed (Federal Reserve),” he said.
On Friday, it was reported that US retail sales for July were more sluggish than expected. At the same time, producer prices recorded their biggest drop in nearly a year in July. These boosted expectations that the US Fed would not be in a hurry to raise interest rates.
Last week, profit-taking activities took place ahead of the release of the second-quarter
GDP, BDO Unibank chief strategist Jonathan Ravelas said.
“Investors took advantage of the high prices to capitalize on their gains made from the recent rally,” Ravelas said.
“Chartwise, the week’s close below the 7,960 levels signals further weakness towards the 7,500–7,800 levels in the near-term,” Ravelas said.
Apart from the GDP report, the market is expected to digest the last stream of corporate earnings reports for the second quarter. Doris Dumlao-Abadilla