Philippine stocks are expected to move sideways with a downward bias, as the market’s recent rally gives opportunities for short-term investors to take profit.
Philstocks Financial Inc. research head Japhet Tantiangco said while the Philippine Stock Exchange index remains at attractive level, the market is vulnerable to profit-taking.
“The three-week rally gives opportunities for those with short term horizons to book gains. However, at its current level, the local stock market is still deemed attractive,” Tantiangco said.
“Hence, we also see bargain hunting possibilities for long term investors,” he said.
The market’s optimism is being driven by hopes that the Bangko Sentral ng Pilipinas and US Federal Reserve would soon implement rate cuts.
Analysts said adding to investor optimism is the appreciation of the peso against the dollar. Week-on-week, the peso appreciated by 0.26 percent to close at 58.380 against the US dollar.
“If this continues, then it is also expected to help the local bourse,” Tantiangco said.
Online brokerage firm 2TradeAsia.com said investors turned more upbeat as the local rate cut appeared more visible amid cooling inflation.
The market’s major support is seen at 6.400 this week, and resistance is at 6,700.
The index added 155.48 points, or 0.39 percent, week-on-week to close at 6,648.23.
Average daily value traded improved to P5.95 billion from previous week’s average of P3.99 billion.
Foreign investors were net buyers last week by P249 million.
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