Local stocks are seen to continue consolidating below 8,000 this week as investors wait for fresh incentives to take a more aggressive position.
Last week, the main-share Philippine Stock Exchange index ended flat at 7,885.90 compared to the previous week’s finish of 7,889.33.
While the market closed last week on a negative note, PNB Securities president Manuel Lisbona said it was still within the trading range of 7,800 to 8,000.
“While net foreign selling (Friday) could be indicative of a risk-off stance by foreign funds, this can only be confirmed if the peso weakens in the next few days,” Lisbona said.
“My opinion is that the funds will remain and buy back at the market’s support level. In the absence of any major developments, it looks to me that the market will trade range-bound for the meantime,” he added.
BDO chief strategist Jonathan Ravelas said investors remained on the sideline while waiting for fresh new leads on the economy.
“Chart wise, the week’s close of 7,885.90 still suggests the market will range between 7,700 –8,000 levels,” he said.
Luis Gerardo Limlingan, managing director at Regina Capital Development, said the markets would likely feed off the latest economic data out of the US: Core consumer price index, retail sales, manufacturing production and industrial production.
“Locally, the market will await the next data point which is the balanced budget, and may start with some positioning ahead of second quarter 2017 earnings results,” Limlingan said.
“Support remains at 7,800, while resistance is pegged at 7,950 (minor) and 8,000,” he said.
Meanwhile, the peso weakened last week by 0.14 percent to 50.65 against the US dollar. It depreciated for the fifth straight week after the country’s trade deficit swelled to almost twice as large as expected in May, BDO’s Ravelas said.