As the stock market resumes trading after a long holiday break, local equities are seen to trade with some bias to the upside this week due to upbeat expectations on local corporate earnings as first quarter results start trickling in.
Last week, the main-share Philippine Stock Exchange index gained 1.06 percent to close on Thursday at 7,661.01. The index also retested the 7,700 resistance level last week.
Joseph Roxas, president of Eagle Equities, said most stocks would likely trade higher this week due to optimism on first quarter results.
Jonathan Ravelas, strategist at BDO Unibank, said last week’s close highlighted that the market would have the momentum to test the 7,800 levels.
“A break above the 7,800 level will point to a further test towards the 8,000 levels and signal that the bulls are back into play,” Ravelas said.
“Continue to see the market to range between 7,400 and 7,800 in the week,” he said.
Meanwhile, Citigroup has listed a number of international events that global markets will watch closely this week. One of these is the May 3 Federal Open Market Committee (FOMC) meeting.
“We do not expect material changes to the statement at the [nonpress conference] FOMC meeting on Wednesday, but are watchful of potential changes to the language on inflation and balance sheet plans,” Citi said.
On May 5, Citi noted that this would be the new deadline for the US Congress to avoid a government shutdown.
Alongside US nonfarm payrolls which will be released on Friday, Citi said US manufacturing ISM and US vehicle sales would be closely watched for confirmation that first quarter weakness was likely temporary.
In Europe, Citi said the major event will be the French presidential election on Sunday where Marine Le Pen and Emmanuel Macron would face off in the second round.
Opinion polls suggest a clear victory for Macron— seen as a “market-friendly” outcome that will eliminate risks of “Frexit” or French exit from the European Union.