Market may hover at 7,250 level

MANILA, Philippines - The local stock market will seek to start the second quarter on a high note as it waits for the announcement of potential economic stimulus measures to break away from its present sideways trend.

For this week, the Philippine Stock Exchange index is seen hovering around the 7,250 level with resistance level at 7,400, according to online research portal 2TradeAsia.com.

Last week, the local equities finished on the plus side, as possible repositioning may have taken place in view of the first quarter portfolio review. 

As such, the market closed 42 points higher at 7,311 or up 0.58 percent week-on-week, with most sectors in positive terrain.

Services led the gainers as it rose three percent.

In terms of market breadth, losers outnumbered gainers, 94 to 87, with market turnover at P7 billion.

The average net foreign outflow widened to P1.3 billion.

Moving forward, 2TradeAsia.com said there are still lingering concerns brewing on the capability of the current US administration to implement the tax reform overhaul.

As such, eyes are set on how the Fed will counter this hurdle in terms of monetary policies.

“The possibility of lesser economic support from fiscal side could weigh on the timing of policy tightening decisions, as the overall aim is likely to incline in supporting economic growth.  Minutes of the Fed meeting will also be on the spotlight this week, specifically on insights how the Fed will move forward while retaining attention on jobs data results, inflation and trade effects from Brexit,” 2TradeAsia.com said.

Despite geopolitical noises, however, major credit rating firms Fitch and S&P 500 have affirmed their stable outlook on the Philippines, underscoring growth opportunities will outweigh uncertainties, it said.

“Fitch cited robust GDP growth with 2017 GDP forecast at 6.8 percent. While for S&P, the resilience of the BPO industry from external shocks brought by Trump’s protectionist policies is their main reason for the stable outlook affirmation. On the other hand, the selection process for the next BSP chief has begun, with deputies Guinigundo and Espenilla among frontrunners alongside Antonio Moncupa Jr. and Peter Favila. A smooth transition could help the next governor gauge the right metrics in assessing inflation and guidance for future rate directions,” 2TradeAsia also said.