The success of the US fiscal budget discussions will set the local stock market’s tone for the beginning of 2013.

The White House and top Republicans struck a dramatic deal to avert huge New Year tax hikes and postpone automatic spending cuts that had threatened to send the US economy into recession.

After months of agonizing over the crisis, weeks of debate about a possible solution, and days of intense, closed-door negotiations, members of the US Senate voted overwhelmingly 89-8 early on Tuesday to pass a controversial bill that averts the so-called “fiscal cliff.”

Jun Calaycay of Accord Capital Equities Corp. said that trading for 2013 begins in earnest with investors expected to cheer an apparent deal brokered between the leaders from both sides of the aisle of the Capitol on the US fiscal cliff.    

“A certain degree of  ‘cashing in profits’ may temper opening trades,” he said.

“The theme that set 2012 to a record-setting pace remains practically the same
this year, plus some fresh impetus.  In  our outlook, we had initially pegged the index to head towards the 6,800 to7,500 range this year,” Calaycay added.

Freya Natividad, analyst at 2TradeAsia.com, also said that the year-ender fiscal plan from the US will create a big impact in the first few trading days of the year.

She earlier said that if no accord is agreed upon prior to the deadline, tax filings for majority of US taxpayers would be delayed until late March, and could push the US economy to recession for first half of the year.  

“Given this, funds would favor high-yielding emerging markets, until risks within advanced economies ebb,” Natividad said.

US stocks rose on the last day of the year, as lawmakers neared a budget deal to prevent over $600 billion in spending cuts and tax increases.

Natividad said that local traders might also give more credence on overseas trends this week.

“Portfolio positioning for the first quarter of 2013 would be selective, specifically towards growth stocks.  Index issues might also take their boost from anticipation of credit rating upgrades this year,” she added.

Local stocks concluded the last trading session of 2012 with a positive note, as investors expect a much better year for the Philippine bourse and the economy in general in 2013.

On the last trading session of the year, the Philippine Stock Exchange index (PSEi) inched up by 0.31 percent or 17.84 points to 5,812.73. The broader all-shares index also had a positive close, rising 0.32 percent, or 11.89 points to 3,698.98.

According to brokerage firm First Metro Securities Inc., the 2012 gain for PSEi reached 32.95 percent.

It said that among major Asia Pacific indices, PSEi’s 32.95-percent gain is second only to Thailand’s 36.95-percent growth.

The PSEi, in general, finished 11 points lower at 5,812.73 or -0.19 percent week-on-week, after moving to 5,848. 

Support stemmed from gains in mining/oil and industrials, which was capped by declines in property and services 

Natividad said that for the upcoming sessions, immediate support is 5,800, and resistance at 5,850 to 5,870.