PH shares seen struggling to stay above 7,800

The local stock barometer is seen struggling to stay above the 7,800 level this week as investors wrap up their review of the local second quarter corporate earnings reporting season.

Last week, the main-share Philippine Stock Exchange index (PSEi) fell by 0.18 percent week-on-week, slipping for the first time in five weeks, after the country’s second quarter gross domestic product (GDP) data underperformed estimates.

“Look for a sustained climb above the 7,800 levels in the near-term to see test of 8,000 levels,” BDO chief strategist Jonathan Ravelas said.

“Failure to stay above 7,800 could call for further losses toward the 7,500 levels,” he said.

Meanwhile, Ravelas noted that the peso was unchanged last week at 53.135 against the US dollar as the Bangko Sentral ng Pilipinas delivered on its promise of strong action to curb inflation.

Christopher Mangun, head of research at Eagle Equities Inc., said there’s a strong indication that the market may pull back this week, adding that 7,820 had proven to be strong resistance that the index could not breach despite the higher trading volume.

Despite the pullback, Mangun noted there were still a lot of trading opportunities.

“We have been very bullish on the property sector since the beginning of the year and we expect it to continue to perform well. We also favor the conglomerates that were laggards last year as investors have found it easier to make money from them as compared to their peers. We see this in the performance of the Gokongwei stocks, any pullback that we see is an opportunity for investors to come in and start making money in this market,” he said.

Foreign funds were net sellers last week, albeit net outflow was only at P64.4 million.