Index seen holding up above 8,000

MANILA, Philippines — The Philippine Stock Exchange index may now have the momentum and the strength to stay above the 8,000 mark and continue on to higher levels. 

This after inflation came in within expectations last week at 2.7 percent or within the Bangko Sentral ng Pilipinas’s target of 2.2 percent to three percent.

In a commentary, Christopher Mangun of AAA Securities said: “The PSEi has been steadily climbing for the last eight weeks and we finally might have a shot at breaking that heavy resistance at 8,150. This was the level that it hit at the beginning of the year, right before it lost 500 points and came all the way down to 7,600.”

Mangun said that while last week was relatively uneventful for the market, it could be the “calm before the storm.”

“If it can successfully break above that resistance level, then we may see it back at all-time highs before the end of the year,” Mangun said.

Mangun believes this scenario may play out over the next few weeks. 

On the other hand, he said that if there would be no rally, then the market could lose another 500 to 600 points and trade sideways till the end of the year. 

“I am more inclined to believe that the former scenario is what will play out. The next few weeks are going to be interesting,” he said.

Traders said investors are also waiting for second half corporate earnings results, which could further provide impetus to the market.

Last week, the PSE, the main index ends up more than one percent, right at the 8,100-resistance line. 

Every other index went up except for the mining and oil sector which is to be expected. 

“However, most investors would agree that nobody really felt the gains and that most of the week was boring and uneventful. We saw below average trading volumes for most of the week with most issues, even blue chips, trading very wide spreads as investors had no clue on what to do this past week. Trading value for the week stood at P29.41 billion. Foreign investors were very active this week, with most trades on several days done by foreign investors. They were net sellers this week with P357.7 leaving our market this week,” Mangun said.

Overall, the main index is up seven percent for the first half.