Stocks are expected to sustain their upward momentum this week in anticipation of positive third-quarter corporate earnings.
“Market players are betting that with the lower inflation and interest rates, margin recoveries are more evident this time than in 2Q19,” BDO Unibank Inc. chief investment strategist Jonathan Ravelas said.
Trading, however, will likely remain thin as some investors opt to stay on the sidelines while waiting for new catalysts that could push the market forward.
“Expect the bounce to stretch towards the 7,900/8,000 levels in the near term. Failure to try the 8,000 level could cause some profit-taking and retest the 7,700 level,” Ravelas said.
Foreign investors are seen to keep their exposure in the local market after turning into net buyers for the past two weeks.
The Philippine Stock Exchange index, the 30-company benchmark, rose 0.45 percent last week to close at 7,885.23 on Oct. 18, while the broader all-share index inched up by 0.29 percent to 4,755.04 despite the thin volume.
Four of the six sectoral indices registered week-on-week gains, led by property (up 1.15 percent), financial (1.1 percent), services (0.26 percent) and holding firms (0.08 percent). Mning and oil declined by 2.95 percent while industrial lost 0.32 percent.
Foreign investors were net buyers by P1.4 billion last week. Average daily value turnover fell to P5 billion from the previous week’s average of P7.3 billion.
The top gainers last week were Macay Holdings Inc. which climbed 38.1 percent to P10.80, Phinma Energy Corp. which advanced by 23.5 percent to P2.84 and Alliance Global Group Inc. which went up 7.9 percent to P11.64.
Heavy losers included Nickel Asia Corp. which declined 7 percent to P3.85, Robinsons Retail Holdings Inc. which dropped 4.2 percent to P76.55 and Global Ferronickel Holdings Inc. which retreated 3.4 percent to P1.68.