With the release of third-quarter corporate earnings soon, Philippine shares can trade higher in the next few days despite lingering overseas jitters.
“Getting off a shortened trading week and going into the bulk of the third-quarter earnings season, stocks may receive a boost next week leading to a first test of the 6,700-[point]mark, even as the general bias will remain sideways,” Accord Capital Equities Corp. analyst Jun Calaycay said.
He said that the domestic picture is more encouraging as investors have struck a balance between external influences, which are mostly negative, and the domestic picture, which to date is still promising.
“But keeping the index significantly afloat above the 6,500-line augurs well to move us further away from the ‘head-and-shoulders’ pattern that for a while ‘scared’ off technically inclined investors and into a consolidation mode,” Calaycay noted.
However, the analyst mentioned that despite central banks across the world generally keeping the policy environment untouched, investors will keep themselves prepped for possible sudden twists, or at least hints that a change may be forthcoming.
For instance, Calaycay pointed out that under normal circumstances, the Federal Reserve’s decision to leave the $85-billion stimulus program as is, in line with the market expectations, should have imparted a positive spin to trades.
“Not so far on Wednesday, US stocks headed lower despite the announcement. Thursday morning, Asian shares took their cue from their peers in the West and adding BOJ’s [Bank of Japan] similar stance on Japanese rates,” he recalled.
On Friday, gloomy overseas tailwinds upset the Philippine stock benchmark index as it wrapped up this shortened trading week.
The Philippine Stock Exchange index concluded last week’s trades with a slight decline, sliding by 0.18 percent, or 11.83 points to 6,585.38, while the broader all-shares index slipped only by 0.01 percent, or 0.31 points to end at 3,977.12. Joining the benchmark index on the red side were three sub-sectors.