A RALLY is likely ahead of first-quarter financial results, in light of the buying support from foreign funds on renewed optimism about the Philippine economy as the mighty dollar loses its luster in favor of most other major currencies especially the Japanese yen, analysts said.
“Post-Easter rallies run high, especially after our local bourse has shown signs of resurgence following its sideways trend since January,” according to online brokerage 2TradeAsia.
“Optimism may soon build in the coming months, ahead of [first-quarter] interim from listed shares,” as the market got a recent boost on nine consecutive days of net foreign buying while the peso rode on the US dollar’s weakness.
Still, there are geopolitical tensions rippling across markets around the world and could sway the sentiment from Philippine shares, according to 2TradeAsia.
“Investors will take their cue from political leaders’ pronouncements, specifically on areas that could weigh on global economy and trade. Any provocative rhetorical statement could sway market sentiment, as fund managers focus on upcoming meetings, particularly the International Monetary Fund’s (IMF) summit on April 21 and the Organization of the Petroleum Exporting Countries (OPEC) Ministers’ meeting on April 22,” it said.
Crude pricing will also be on the spotlight after West Texas Intermediate (WTI) rose 2 percent last week due to expectations that OPEC and non-members would adhere to an agreed output cut.
“This early, commodity traders see increased chances for crude futures to jump above $54 per barrel, which could push inflation in the second quarter,” 2TradeAsia said.
Regina Capital Corp. Managing Director Luis Limlingan said the market “may seek leads from the initial US jobless claims that will be released on Thursday.”
The immediate resistance is at 7,700 on the benchmark PSEi with immediate support at 7,430, Limlingan said.
The PSEi managed to stay at the 7,600 level last week despite the three-day trading week on account of the Holy Week break. It was up 0.61 percent or 46 points week-on-week at 7,629. All sectors were in green territory, except for Financials which was down 0.55 percent. Net foreign buying totaled P219 million.