The benchmark Philippine Stock Exchange index (PSEi) could trade sideways over the next few days after last week’s recovery above the 7,000, analysts said.
The PSEi added 2 percent for the week to end at 7,151.52. However, its advance could be capped by heavy resistance between 7,200 to 7,300, said Luis Gerado Limlingan, managing director at Regina Capital Development.
“I think it will trade sideways,” Limlingan predicted.
Analysts have also pointed to the relatively low volume in the market, meaning investors were mostly staying on the sidelines. The average value turnover for the week stood at P4.75 billion.
Limlingan, however, noted that the third-quarter earnings season was expected to start toward the end of this week. This could increase activity in the equities markets. The results of the earnings season could provide either relief or further worries for investors, considering that the third quarter was when the rise in the cost of basic goods and services reached a nine-year high.
Jonathan Ravelas, BDO Unibank Inc. chief strategist, had earlier said the PSEi could face resistance up to the 7,300 level. The near-term support stood at 6,800.