MANILA, Philippines—The local stock market is seen taking a breather this week after surging close to—but failing to break out of—the 5,000 level last week.
Investors are more likely to lock up gains from blue chips, putting downward pressure on the main-share Philippine Stock Exchange index, but there will still likely be some excitement on some second-lingers, according to Pentacapital Investment strategist Erico Claudio.
Last week, the PSEi hit a new intra-day high of 4,997.04 but closed at 4,893. It was only slightly higher compared to 4,880.71 the previous week.
In the past two days, Claudio noted that profit-taking was prevalent while foreign buying was slowing down. “Also, there’s some consolidation in the US market so there will likely be some correction. But there’s still a strong possibility of a strong play in secondary stocks after the surge in blue chips.”
Meanwhile, he said 5,000 might be difficult to break for now. In technical analysis, he said a round number with many zeros was usually psychologically difficult to pierce.
Although the fourth-quarter corporate reporting was not yet over, based on what has been reported, Claudio said there have not been too many surprises. “This is what happened in the past couple of days—good market opening then sell-off toward the end of session. This is symptomatic of a correction,” he said.—Doris C. Dumlao