Market seen taking a breather

MANILA, Philippines - Local stocks are expected to trade sideways this week as investors track developments in world markets.

The main composite index broke past the 2,900 major resistance level last week, closing 122.75 points or 4.4 percent higher at 2,942.78. The growth was attributed to encouraging economic data and the strength of the major bourses abroad.

“Despite the recent breakout from an important resistance, the local stock market might take a breather. There seems to be a lack of conviction and fundamental backing on the market’s technical breakout. We noticed that volume was quite thin on the breakout day and after that,” said AB Capital Securities.

AB Capital Securities said a strong market rally abroad would help the local market make its run beyond 3,000.

Stock portal 2tradeasia.com said some mining, oil-related and construction issues are expected to take centerstage this week.

Boosting market sentiment is the growing optimism on the country’s economic growth.

The National Statistics Office (NSO) reported last week that the country’s inflation rate remained low at 0.7 percent in September, bringing average inflation rate for the first nine months of the year to 3.4 percent, which was still within the government’s official target of between 2.5 percent and 4.5 percent.

“With inflation still in control, we are expecting the Bangko Sentral ng Pilipinas to maintain low interest rates,” AB Capital Securiteis said.