Consolidation in PH stock market seen to continue

The local stock barometer is seen to continue consolidating this week as investors digest the ongoing stream of local corporate earnings and offshore developments.

Last week, the main-share Philippine Stock Exchange index rose by a meager 9.58 points or 0.13 percent to close on Friday at 7,244.79. Investors tended to dump shares whenever the index neared the 7,300 barrier and buy anew whenever the barometer slipped to the 7,100 levels.

“Stock market benchmark index remained range bound, finishing the week almost unchanged at 7,244.79. Renewed rate hike fears in the US, following (US Federal Reserve) Fed chair Janet Yellen’s statement in Congress, caused local players to lighten up their position,” said Jonathan Ravelas, chief strategist at BDO Unibank.

Chartwise, Ravelas said the week’s close at 7,244.79 continued to suggest that the market would remain range-bound between the 7,000–7,400 levels in the near term.

“Only a move above the 7,500 levels will call the bulls back to play,” he said.

Meanwhile, the peso continued to weaken for the second straight week last week, touching the 50:$1 barrier after Yellen said the US central bank was on course to raise interest rates. According to Yellen, waiting too long to remove accommodation is seen unwise as the committee will evaluate whether employment and inflation are continuing to evolve in line with these expectations in their upcoming meetings.

In the near term, Ravelas said the peso could trade within the 49.70–50 levels.

“A break above the 50 levels could test the 50.17 (2008 high) levels,” Ravelas said.