“Week on week, the PSEi gained 128.5 points on the ADB’s (Asian Development Bank) prospect of growth for the Southeast Asian region...” investment management firm BPI Asset Management said in a market report late Friday.
The ADB at its annual meeting last week highlighted the region’s economic dynamism.
This, coupled with strong corporate results, pushed the main index to new historic highs on Wednesday (5,228.84) and Thursday (5,300.41), despite an intraweek holiday due to Labor Day, according to a separate market report by brokerage AB Capital Securities, Inc. last Friday.
After sliding last Friday due to profit taking, the PSEi is expected to decline further this week with investors likely to continue cashing in gains.
“The market might consolidate and correct because last week, we reached all-time highs and in the United States, markets went down because of disappointing jobs data,” said Elizabeth S. Abadillo, analyst at brokerage Angping & Associates Securities, Inc., in a text message yesterday.
US markets plunged last Friday on data showing jobs growth had slowed in April, jeopardizing the country’s economic recovery.
Blue-chip Dow Jones industrial average slid by 1.3% or 168.32 points to close at 13,038.27, while the broader Standard & Poor’s 500 index fell by 1.6% or 22.47 points to 1,369.10.
Tech-rich Nasdaq composite index lost 2.25% or 67.96 points to 2,956.34.
Overbought stocks may also prompt selling this week, but investors would also monitor data both here and abroad.
“The market may encounter some profit taking [this] week as current high valuations may discourage investors from coming in. Buying interest still looks strong but selling pressure at lofty prices is equally strong. A lot will depend on corporate earnings results that would be released [this] week,” AB Capital said.
This week, investors will be watching out for the release of the earnings reports of blue-chip companies Ayala Land, Inc., and Globe Telecom, Inc., which would be holding media and analysts’ briefings in the middle of the week for their January to March results.
For the long term, the market’s prospects remain good as the country is expected to post brisk economic growth on the back of improved government spending.
“The last couple of weeks have strengthened our resolve to hold our yearend index range projection of between 5,600 and 5,800, representing an annual growth of between 28% and 33% from the 4.07% last year,” said Justino B. Calaycay, Jr., analyst of brokerage Accord Capital Equities Corp., in a market report last Friday.
“We share the confidence expressed by keen observers on the prospects of the domestic economy, which are hinged on a reversal of 2011’s tempered public spending, a rebound in exports and sustained flows of remittances from Filipinos overseas,” Mr. Calaycay added.
Initial support and resistance levels for the week are pegged at 5,250 and 5,350 to 5,400, respectively, said Freya B. Natividad, analyst at online brokerage 2TradeAsia.com, in an e-mail last Saturday
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