The stock market will be looking for new catalysts that will give it new direction, after the benchmark index hit an intra-week high at the 8000 level last week.
“Having touched an intra-week high of 8,046, we may see gauges stabilizing for now, as investors heed sequel catalysts that can propel the market to higher ground,” online brokerage firm 2TradeAsia said over the weekend.
“The sideways pause would be a good launching pad for higher long-term results, reflecting the administration’s thrust toward inclusive economic growth,” it added.
Last week, the benchmark PSEi breached the 8000 level as investors held an optimistic view that Super Thursday would not yield any negative effects on the Philippine market. It was the highest year-to-date level after the index reached 8,051.40 points on August 10, 2016.
Regina Capital Corp. President Marita Limlingan said the market is expected to move upward.
“I think the market will resume its upward move. [Former US FBI Director James] Comey’s testimony was a dud, the UK elections won’t really have a significant effect on the Philippines, and hopefully, our troops will recapture Marawi,” Limlingan said.
“In addition, consumer confidence rises, the jobless rate eases, and exports continue to go up,” she added.
On Friday, a report from the Bangko Sentral ng Pilipinas (BSP) showed that Filipino consumers have turned more optimistic, driving the confidence index to a record high of 13.1 percent in the second quarter of the year, against 8.7 percent in the first quarter.
BSP Department of Economic Statistics (DES) Rosabel Guerrero said it was the first time the confidence index hit a double-digit rate as it surpassed the previous record of 9.2 percent posted in the fourth quarter of 2016.
Also in the spotlight were geopolitical headlines, which might take their toll. One was the latest loss of Prime Minister Theresa May’s majority in the UK parliament, which could make Brexit transition more difficult, 2TradeAsia said.
Crude futures pricing may also have an impact, as recent political tensions could affect an earlier accord on output caps. Overall, these international events would support increased funds flow, as fund managers reassess their second-half prospects.
On Friday, the benchmark index rose 0.40 percent, or 31.61 points to close at 3,787.81. The wider All Shares gained 0.25 percent, or 11.73 points at 4,749.13.