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Market to extend rally this week

Share prices are expected to sustain their upward momentum this week on positive developments in the local economy and the return of foreign funds.

“With positive sentiment finally here due to the aforementioned low inflation figure, and with what seems to be a comeback of foreign funds especially with last Friday’s P1-billion print, next resistance for the PSEi is around the area of 7,900—level of previous high,” said Papa Securities trader Gabriel Jose Perez.

“However, do still continue to keep an eye out for how the US markets move as more drastic drops could still dampen the overall sentiment,” he added.

BDO Unibank chief investment strategist Jonathan Ravelas said investors were buying blue chips that would benefit from a possible reversal of foreign inflows and positioning in stocks that would gain as inflation eases.

Among these sectors are consumer-related stocks, as well as property and infrastructure-related companies.

Aside from easing inflation rate, consumer-related stocks are also expected to benefit from the upcoming May elections.

The bellwether Philippine Stock Exchange Index last week jumped 3.95 percent to close at 7,761.11, while the broader All Shares Index rose 2.98 percent to 4,625.59

All counters ended in green, led by mining and oil which climbed 8.2 percent; property which advanced 6.8 percent; holding firms which gained 3.6 percent; financials and services which added 2.8 percent and 1.9 percent, respectively.

Foreign investors were net buyers for the week by P1.2 billion, while the average daily value traded stood at P6.5 billion.

Weekly top price gainers were Philex Mining Corp., which rose 23 percent to P3.80; Filinvest Development Corp., which climbed 14.1 percent to P13.26; and Nickel Asia Corp., which climbed 11 percent to P2.44.

Weekly top price losers were Philippine Savings Bank, which declined by 7.7 percent to P57.50; LT Group Inc., which lost 3.5 percent to P16.02; and Manila Water Co Inc., which fell 2.1 percent to P27.65.

Global stocks, meanwhile, shot higher on Friday following a strong US jobs report and dovish comments from Federal Reserve Chair Jerome Powell on the prospects for higher interest rates.

Those back-to-back market-friendly developments helped US and European stock bourses surge higher and set aside for now nervousness over trade wars, a US government shutdown and a slowing economy that have pressured stocks for most of the last month.

“A solid set of job numbers and some comfortable words from the chairman of the Federal Reserve have been just the ticket to get markets into bullish mode,” said Chris Beauchamp, chief market analyst at online trading platform IG.

The Dow finished up 3.3 percent, or nearly 750 points, to end the week at 23,433.16, more than making up for the 2.8 percent slide on Thursday amid worries over slowing growth.

Bourses in Paris, Frankfurt and London all surged at least two percent, also boosted in part by the US momentum. With AFP

Topics: Stock Market , Philippine Stock Exchange , PSE , Philippine Stock Exchange Index , PSEi
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