Shares to take breather after 8-day rally

MANILA, Philippines - Local stocks are likely to take a breather from last week’s run-up, trending lower as investors are expected to temporarily unload their holdings ahead of the Lenten break.

Junie Banaag, head of First Metro Investment Corp.’s Investment Advisory Group, said profit-taking will set in after share prices gained for eight consecutive days. 

“Profit-takers will find the nine percent gain in the PSEi in just three months into 2009 too attractive to ignore,” Banaag said.

The PSEi closed 51 points higher Friday  at 2,040.25 or 2.61 percent day on day led by PLDT which rose by P115 to P2,190. 

Stock portal 2tradeasia.com said the PSEi could move beyond 2,000 territory, especially with PLDT ADRs’ ascent in New York. Immediate support is seen at 2,000.

The PSEi’s rise the past trading sessions was attributed to the positive gains that the US stock exchanges posted owing to recent positive economic reports.

According to reports, the five key areas of the US economy are showing signs of life. Durable goods unexpectedly rose last month for the first time since July while non-defense capital goods increased 6.6 percent.

Sales of new and previously occupied homes also went up by 4.7percent and 5.1 percent respectively. Retail sales also experienced good news by dipping by only a mere 0.1 percent which was not as sharply as expected by retail giants. This figure actually rose in January.

Announcements that Citigroup and Bank of America were profitable last January and February boosted investor sentiment. 

“However we note that there are still many speculations regarding such statistics and that although outlook looks good, it may only be the end of the beginning of the recession but not the end of its downturn.

Regardless of which news are better than expected. These coupled with President Obama’s administrative plan to relieve banks of its toxic assets provided a good turn for the US Market, which in turn provided a positive sentiment for the local market,” AB Capital Securities said.