Anxious waiting for local stocks as Trump takes world for a ride

Local stocks are seen to continue consolidating this week as investors await fresh catalysts and assess gains from the sharp rally at the start of the year.

The main-share Philippine Stock Exchange index (PSEi) closed on Friday at 7,232.66, flat from the previous week’s finish of 7,238.52.

On Friday, the Dow Jones Industrial Index gained 0.48 percent or 94.85 points to close at 19,827.25 on the inauguration of new US President Donald Trump. This was first time in 50 years that the US stock market had gone up on the inauguration of a new US president.

Eagle Equities president Joseph Roxas said the local market could take its cue from the firmer trading on Wall Street last Friday. At the local market, he said recent themes that dominated the market would likely continue, with investors picking up companies involved in gaming, tourism and consumer sectors.

He said the index could continue its consolidation phase, but with some upside bias.

In a research note, local stock brokerage AB Capital Securities said this week, the PSEi may track US employment and preliminary gross domestic product data, the United Kingdom’s high court ruling on whether Britain can initiate Article 50—or the formal mechanism for leaving the European Union—without a parliamentary vote, alongside market reaction to Trump’s first few days in office.

AB Capital noted that the index had consolidated between the 7,100 and 7,300 range last week, having encountered strong resistance at the 7,400 level. It said the latter would need to be breached in order for the index to return to previous highs.

For the catalysts, the local stock brokerage noted that full-year corporate earnings would be due next month and the full-year gross domestic product figure slated later this month.