Local share prices may trade sideways with a downward bias this week on technical correction after four straight weeks of gains, analysts said over the weekend
Philstocks Financial Inc. research head Japhet Tantiangco said while the market has positive momentum, some pullbacks may occur as traders would likely book profits from previous gains.
“However, at its current level, the local market is still deemed fundamentally undervalued,” Tantiangco said.
Among the factors that could support the market’s upward momentum is the onset of the earnings season and the continued strengthening of the peso against the dollar.
He said hopes of a rate cut by the Bangko Sentral ng Pilipinas also continue to boost investor sentiment.
“The local currency, if it strengthens further against the US dollar and Wall Street, if it continuous to post record performance, are also expected to prove aid to the bourse,” Tantiangco said.
Analysts noted, however, that some investors expressed concerns that Donald Trump’s second presidency could lead to higher inflation and interest rates for the US economy.
Resistance is seen at 7,000 this week, and market support at 6,700.
The Philippine Stock Exchange index jumped 2.16 percent last week to close at 6,791.69, while the broader all-shares index rose 1.44 percent to 3,627.83.
The PSEi has risen by 10.28 percent in the past four weeks, buoyed by hopes of easing interest rates.
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