MANILA, Philippines — The stock market this week may be characterised by follow through buying on Chinese New Year ahead of the release of the January inflation numbers, according to First Metro Investment Corp. vice president Cristina Ulang.
Ulang said investors would closely monitor the corporate earnings report, noting that outperformance versus estimates would hold the key to sustained foreign buying.
Christopher Mangun, head of Eagle Equities, said that there may be lower trading volumes this week.
“This week is the first trading week of February and with only four days of trading we are going to see lower trading volumes as the holiday is in the middle of week and investors may take a break from trading and take the week off,” he said
Thus, he said the market may continue to trade sideways between 8,000 and 8,200.
“The index may end the week lower, but the key is for it to stay above the 8,000 level. If we continue to see heavy foreign inflows, then the market may sustain its current momentum. Local investors have started taking some risk off the table and currently foreign money is supporting the market. With earnings reports set to start coming in this week on top of better inflation numbers for January, we may see the market factor this is and maintain its current trajectory,” he said.
Last week, the market was pulled up by rosy western equities markets which rose after dovish comments from the US Fed.
The main index ended the week 90.96 points higher or 1.13 percent to close at 8,144.16.
In the first three days of trading, there was a pullback, even touching the 7,900 support level.
However, in the last two trading days there was already a complete reversal, eventually breaking above 8,100 in the afternoon trading session on Friday, Mangun said.
Foreign money flooded the market with net foreign buying at P5.74 billion.
In all, the PSEi ends the month of January 7.3 percent higher which is the market’s best performance since March 2016.
source: philstar.com
