PH stocks still on positive track but now prone to correction


Philippine stocks are expected to reflect positive reaction to favorable March inflation figures and optimism on the global markets when it resumes trade today, but that may be tempered by technical factors as prices look ripe for a correction after recent record runs.

Trading on the Philippine Stock Exchange was suspended Thursday as the nation observed the Day of Valor.

“The local market is expected to stay on an upward course,” Bryan Gomez, co-head of investments at Citisecurities Inc., said in a text message.

“The lack of negative catalysts is also factored in, but more importantly, the low headline inflation,” he said, adding that if inflation is sustained at such benign levels, it could also have a positive bearing on the market.

But further upside and market inclination to see positive news supportive of “momentum buying” may be affected by any trend indications in US corporate earnings, especially as some other analysts see the Philippine market looking vulnerable to profit-taking after it recently traded in record territory consistently for more than a week.

“Shanghai, Hong Kong and Japan have been quite strong as of late … The earnings season in the US is upon us again, and we will see how they did when the dollar was strong,” Gomez said.

Astro del Castillo of First Grade Finance Inc. and Justino Calaycay Jr. of Accord Capital Equities Corp. take the thinning trade volumes on the PSE as an indication that the market may be susceptible to a correction in the coming days.

On Wednesday, the Philippine Stock Exchange index (PSEi) closed with a loss of 0.57 percent or 45.99 points at 8,052.69, snapping an eight-day winning streak. Prior trade marked another record finish for the index, its 26th peak this year, posted Tuesday.

The All Shares index on Wednesday dropped 0.40 percent or 18.69 points to 4,610.10.


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