Local stocks are expected to see little action this week as many investors will likely be on a holiday mode even before the market pauses for the Lenten break.
Last week, the Philippine Stock Exchange index rose by 0.1 percent week-on-week to close on Friday at 7,880.82. The 8,000 mark was briefly breached during the week as foreign flows continued to support local equities.
The market’s climb last week was capped by local and offshore growth jitters.
“The week’s close at 7,880.82 highlights further consolidation within the 7,700 to 8,000 levels,” BDO Unibank chief strategist Jonathan Ravelas said.
“Look for a sustained rally above the 8,200 to signal breakout from the 7,700/8,000 consolidation levels,” he said.
This week, there will only be three trading days (Monday to Wednesday) as the financial markets pause on Thursday and Friday for the Lenten break.
In the meantime, the peso strengthened for the second straight week last week by 0.64 percent to 51.765 against the US dollar after minutes of the Federal Reserve’s March meeting showed policy makers facing significant uncertainties, ranging from Brexit talks to slowdowns in Europe and China.
“Cooling US inflation reinforced the central bank’s message of patience on interest rates. This caused
the greenback to trade weaker against a basket of major and regional currencies,” Ravelas said.
Chartwise, Ravelas said the week’s close at 51.765 signaled that there were still some room for further currency appreciation toward the 51.50 levels in the near-term. He expects the currency to range between 51.60 to 51.90 levels against the greenback. —DORIS DUMLAO-ABADILLA