Philippine stocks seen to pull back

Local stocks may pull back this week after last week’s quarter-end window-dressing and improved global sentiment brought the main index closer to record highs.

The Philippine Stock Exchange index gained 54 points, or 1 percent, last week to close at 5,346.10 on Friday. The index is nearing the all-time high closing of 5,369.98 and the record intraday high of 5,403.16, both seen last July.

“With the market struggling to stay above the 5,300 levels, the market appears tired and in need of a much-awaited correction,” said Banco de Oro Unibank chief strategist Jonathan Ravelas.

Ravelas said a break below the 5,280 levels could call for further losses toward the 5,200 levels in the near-term. “At the moment, the near-term bias still calls for a revisit of the July 4 high of 5,403.16,” he said.

In its weekly commentary, BPI Securities said this week, “market movement may be limited to some selected stocks with downward bias and possible profit-taking.” It noted that some US economic indicators closely awaited this week were the ISM manufacturing index, consumer spending, jobless claims, Federal Open Market Committee minutes and employment situation.

DA Market Securities said that in the aftermath of stimulus announcements worldwide, there was a renewed focus on the latest European developments, particularly on recent protests against austerity measures in Greece and Spain, and the uncertainty over a banking union, which would give the European Central Bank authority over national central banks. At the same time, it said the US continued to show poor job growth and the December 31 deadline of the fiscal cliff might come to the forefront.—Doris C. Dumlao