Market seen to consolidate after recovery


Philippine stocks are seen to consolidate further this week after recovering from a more than 3-percent decline before ending previous week’s session, given lack of good news being anticipated in the local market.

Freya Natividad, analyst in the online brokerage, said that the market might go through consolidation mode until fund managers get to their senses on fundamental growth support that would help justify prevailing market valuations.

She cited that yields on fixed-income instruments remain unattractive at this point, although volatility is becoming evident at the foreign exchange mart especially with the latest weakness of the yen against the greenback.

“Hopefully, the latest sell-off in regional equities will be deemed as ‘temporary,’ especially once fresh funds or new players come in. It would be too nascent to confirm a possible shift in securities selection for now, unless central banks worldwide confirm a halt in their monetary stimulus plan,” she further said.

“Consistency in net foreign selling indicators will be given weight in investors’ overall gauge, while taking to account the likelihood for major changes in monetary and fiscal efforts,” she added.

She also said that market participants may take their cue abroad for now until good catalysts emerge to renew interest in local equities trading.

“Stay alert for possible surge in buying as soon as supply-side pressure subsides,” she advised.

On Friday, the euphoria over the country’s first-quarter 7.8-percent gross domestic product growth was finally at the local stock market, which brought back the benchmark index to the 7,000-point level.

The Philippine Stock Exchange index recovered from its Thursday slump, rising 0.99 percent, or 68 points to 7,021.95, which contrasted the fall of the wider all-shares index by 0.14 percent, or 6.15 points to 4,292.03.

For this week, immediate support is 7,000, secondary at 6,900, resistance at 7,070-7,130.


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