Market may still keep momentum

The local stock market opens today from a long weekend break right into the start of the “ghost month,” historically a weak season for financial markets.

Last week, the Philippine Stock Exchange index rose by 1.11 percent to end at 8,016.73 on Friday, staying afloat the 8,000 mark after the second quarter gross domestic product (GDP) growth of 6.5 percent slightly beat expectations.

A new intra-day high of 8,105.01 was hit last week.

“Chartwise, the week’s close of 8,016.73 continues to highlight that the market still has momentum to try the 8,100 to 8,150 levels,” said Jonathan Ravelas, chief strategist at BDO Unibank.

Ravelas sees the PSEi’s immediate support and resistance at 7,850 and 8,100 levels, respectively.

Meanwhile, the seventh Lunar month or the “ghost month” starts today and will end on Sept. 19. This is the period in the Lunar calendar when Chinese investors avoid making big-ticket investments or other big moves like getting married or moving to a new house. This period typically coincides with the season when investors in the West take their long summer break, resulting in lower trading volumes.

In global markets, Citigroup said attention this week would be focused on potential policy hint at Jackson Hole Symposium (Thursday-Saturday).

“In the US, political developments and how these could affect the Administration’s ability to deliver tax reform will also be the focus,” Citi said.

Among the key US economic data to watch out for is July’s durable goods orders, which Citi expects to drop by 6.4 percent month-on-month.

Meanwhile, the US-South Korea joint military exercise was scheduled to start this week.

In Europe, Eurozone’s manufacturing PMI is expected to moderate, Citi said.