Earnings results to affect market this week

MANILA, Philippines — Investors will be looking for more stock trading catalysts this week that include corporate earnings results expected to kick off in early February, said Unicapital Securities.

“The robust Philippine economic growth report supports the sideways movement of the PSEi just above the 7,000 level. This indicates that market sentiment still leans toward a positive outlook, however, lacking catalysts,” it said.

Last week, the benchmark Philippine Stock Exchange index (PSEi) turned sideways.

It closed the week flat at 7,052 or down by 0.06 percent. Save for holdings and financials, most sectors fell, and the average value turnover dropped by 28.37 percent week-on-week while net foreign buying eased to P357 million or a decline of 60.7 percent.

2TradeAsia said last week’s mini-consolidation appears to be plateauing after several weeks of bullish energy.

The narrowing trading range should be healthy for the market to gather more stream, pending stronger catalysts in the first quarter. Catalysts can include fourth quarter earnings starting in mid-February, it said.

Moving forward, 2TradeAsia said there may be some selling pressure during intraday rallies, pending stronger catalysts in the market.

Immediate support is seen at 6,900 while resistance is at 7,100 to 7,200.

It noted that economic recovery remains a factor that is influencing investors into the market.

The 2022 economic growth at 7.6 percent shows that despite the macro headwinds, fundamentals such as household spending and capital formation remain sound and intact.

“Key wildcard factors that may spoil our projections for 2023 include food inflation for the first quarter of 2023 and cadence of rate changes in 2023, the latter of which will most likely mirror the US Federal Reserve,” 2TradeAsia said.