Local stocks are seen trading in a tight range this week to allow consolidation after recently hitting new record highs especially as fresh global growth jitters arise.
Last week, the main-share Philippine Stock Exchange index dropped 2.8 percent week on week to finish at 5,214.52 on Friday. The mining/oil sub-index took the worst beating last week (-5.37 percent) following the issuance of a mining executive order that is seen eating into miners’ earnings.
Banco de Oro Unibank chief strategist Jonathan Ravelas said investors last week capitalized on their gains from the previous week’s rally but noted that some bargain-hunting emerged at the end of the week, causing the market to close slightly off the week’s low.
“Chart-wise, we continue to see the market to range between the 5,150–5,250 levels in the week ahead. A break below the 5,150 level would suggest a much larger correction possibly toward the 4,850 level,” Ravelas said.
Freya May Natividad, an analyst at 2TradeAsia.com, said investors’ attention reverted to episodes in the eurozone’s debt problem after the latest weekly labor data in the United States fell short of expectations. “The signing of the new EO on mining elicited mixed reactions, as details would have to wait deliberations by Congress,” she said.—Doris C. Dumlao