Stocks seen testing 7,400 level

Locals stocks are seen to trade with an upside bias this week, possibly testing the 7,400 barrier, on stable risk appetite among domestic investors.

Last week, the Philippine Stock Exchange index gained 0.58 percent week-on-week to close on Friday at 7,311.72.

Joseph Roxas, president of local stock brokerage Eagle Equities, said that with local investors again awash in cash following the listing of Wilcon Depot on Friday, there would be more liquidity to chase stocks this week.

In recent weeks, the P7-billion all domestic initial public offering of Wilcon siphoned off cash from the market, as is the case whenever there is a big IPO.
Roxas said it was possible that the PSEi might break out into the 7,400 level.

“Chartwise, the week’s close at 7,311.72 continues to highlight the market remaining range bound between the 7,000-7,400 in the near-term,” said Jonathan Ravelas, chief strategist at BDO Unibank.

“A break below the 7,150 levels suggests further weakness toward the 7,000 levels. Only a break above the 7,400 levels could call the bulls back into play,” he said.

Last week, the peso strengthened by 0.33 percent week-on-week to 50.16 against the US dollar following US President Donald Trump’s failure to pass his first legislative test to repeal and replace Obamacare.

Ravelas noted that fears of further setback on his tax overhaul and infrastructure plans caused traders to sell the greenback, allowing the peso to recover some of its losses.