Philippine stocks seen to consolidate this week

Local stocks are seen to continue consolidating this week but with an upward bias that can bring the main index to retest the 5,100 levels.

For the week, the main index lost 68.37 points, or 1.3 percent, to close at 4,994.07 on Friday. Wall Street, on the other hand, had its best weekly performance for the year, advancing 3.6 percent on optimism that Spain would ask for help from the European Union to boost ailing banks.

Local stocks have risen from oversold conditions based on charts but were still at the bottom and showing signs of testing the upper end of the consolidation range, according to Eagle Equities Inc. president Joseph Roxas.

“It remains to be seen whether we’ll break 5,100 but as long as international markets cooperate, maybe we could,” Roxas said.

After dropping to a low of 4,890.20 at the start of last week, Banco de Oro Unibank chief strategist Jonathan Ravelas said bargain-hunting pushed the market temporarily back above the 5,000 levels, reaching a high of 5,044.59 and closing the week at 4,994.07.

“Issues about oil prices appeared to have disappeared, leaving concerns in the eurozone and the US as key risks,” Ravelas said. “Expect the market to continue ranging between 4,850 and 5,100.”—Doris C. Dumlao