LOCAL stocks are expected to trade within a tight range this week as investors await the outcome of the US Federal Reserve meetings later in the week and the release of more corporate earnings results for the third quarter.
“We expect the local equities market to trade sideways and move within the range of 6,986 to 7,150 [points]as consolidation is expected to continue,” BPI Asset Management said in a weekly market outlook.
“Events overseas may continue to drive the direction of the local market due to the lack of domestic catalysts . . . However, further regulatory measures such as those released [last]week may lead to further volatility,” it added.
Justino Calaycay Jr. of Accord Capital Equities Corp. said he expects the market to retest 7,200 points this week.
“Sometime in the middle of last week, we adverted to a possible test of the 7,100 to 7,200 range. We found ourselves inside this range at the close of the trades. Thus, it is reasonable that with the above influences, and with locals having something more concrete to chew from the domestic end, the bias this week will remain positive. A test of 7,200 is likely,” Calaycay said.
AB Capital Securities Inc. agreed with this view, saying in their weekly market report that they expect the Philippine Stock Exchange index (PSEi) to move sideways this week after momentum was reawakened following last week’s advances.
“The market was up 1.43 percent week-on-week following international leads as momentum has once again turned bullish on strong US corporate earnings results,” AB Capital said.
“With the local earnings announcement season also fast approaching, we expect the index to go sideways with a bullish bias as investors anticipate ahead of Fed Chairman Yellen’s speech and local corporate earnings releases,” it added.
AB Capital said that if the PSEi breaches the 7,160 resistance level, then it would be poised to go into a near-term bullish momentum and to retest 7,300 points again.
Despite overseas markets ending mostly higher last week, the bellwether PSEi dipped on Friday, led by declines in property and banking-related stocks. The main index slipped 12.58 points or 0.18 percent to 7,103.55 while the All Shares was down 3.96 points or 0.81 percent at 4,195.87.