SHARES OUTLOOK FOR THE WEEK

Support to come from earnings, steady inflation

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A FRESH stream of corporate results on the heels of steady inflation in the first quarter are likely to support Philippine shares this week after the market finished on a strong note on Friday.

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“April inflation clocked in at 3.4 percent, within central bank’s estimates, and may help support expectations that the Monetary Board (MB) will keep rates steady when it meets on May 11. Although most consumer-related plays are already trading at premium vis-à-vis the market, upsides will depend on tax reform details under the Dutertenomics, which could positively impact disposable income and consumption,” online brokerage 2TradeAsia said over the weekend.

Eagle Equities President Joseph Roxas and Regina Capital Corp. Managing Director Luis Limlingan noted more corporate results may usher in this positive week.

“The index is trying to make it to 8,000 but will be met by resistance at the 7,900 level. Since we traded so high so quickly, immediate support is at 7,700,” Limlingan said.

Also on the spotlight is the ongoing French presidential election from which a Macron-finish could help boost sentiment and lessen volatility in the foreign exchange market as another euro exit overhang will be and a win for nationalist Marine Le Pen could trigger a downtrend.

Likewise, fiscal spending and US tax cuts will support higher investment and consumer demand.

“As the PSEi approaches the crucial 8,000 mark, all eyes are on the continuity of the local bourse’s ascent and macro catalysts that will further propel gauges. It would be timely to consider increasing equities holdings to generate improved real returns,” according to 2TradeAsia.

The 30-stock PSEi rallied for a 2.36-percent or 181-point week-on-week gain at 7,841 with all sectors advancing, led by the Mining and Oil index after the Commission on Appointments rejected Gina Lopez as Environment secretary.

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