Market still awaiting fresh incentives

Investors are seen picking up clues from the ongoing third quarter corporate earnings reporting season this week, awaiting fresh incentives to revisit recent highs.

Last week, the main-share Philippine Stock Exchange index gained 0.97 percent to close on Friday at 8,376.13, firming up for the first time in three weeks.
On Friday, the PSEi tested the 8,600 level in intra-day day, hitting a new intra-day peak of 8,605.15 before succumbing to profit-taking.

BDO chief strategist Jonathan Ravelas said investors were continuing to position ahead of the third quarter corporate earnings results.

“Chartwise, the week’s close at 8376.13 highlights the market could still try another assault toward the 8,500 to 8,600 levels in the near-term,” Ravelas said.

BDO sees immediate support and resistance levels at 8,300 and 8,600 levels, respectively.

Perception that the incoming US Federal Reserve is dovish also helped bring the index to new highs on Friday, before falling due to profit-taking.

Jay Powell, US President Trump’s pick as the next US Fed chief, has consistently voted with incumbent chair Janet Yellen to keep rates low and to raise them cautiously. If and when confirmed, Powell will succeed Yellen in February.

A lawyer who graduated from Georgetown, Powell would be the first Fed chair in three decades without a PhD in economics.

Joseph Roxas, president of Eagle Equities Inc., said the PSEi would likely enter a consolidation phase between 8,200 and 8,600. He said earnings surprises from index stocks could help sway the main index.