Market seen moving sideways

MANILA, Philippines - The market is expected to move sideways this week as investors will opt to wait for the smoke to clear in Europe, traders said.

In a report on its website, AB Capital Securities said the release of first quarter corporate earnings has left very little news to drive the market, as numerous stocks have reached technically oversold levels during the recent sell off and there are still very few issues that have reached bargain levels.

“In fact, foreign funds have been taking profits and still are doing so. This is clearly reflected in the depreciation of the local currency, which has dropped to 43.95 against the US dollar,” it said.

The Philippine Stock Exchange index (PSEi) staged a technical rebound last week, aided by the lack of fresh negative catalysts. Gains were modest as investors know that the troubles in Europe are far from over. Investors shied away from stocks despite the sharp drop recently due largely to concerns on the euro zone, worried that Greece might exit from the 17-nation euro bloc.

Confidence was also tempered by some weak economic data released late last week. This was exacerbated by some weak manufacturing numbers from China and Germany. 

The PSEi ended up 46.55 points or one percent week on week to 4,925.97. The broader All Shares Index also inched up 27.57 points or 0.80 percent week on week to 3,293.65. 

AB Capital said the PSEI’s immediate trading range is seen to linger between 4,860 to 5,030, as near term selling pressure seems to have tapered off as shown by the flattening medium term moving average.

In a separate report, DA Market Securities likewise said the market may continue to trade sideways with resistances at 5,000, 5,100 and initial support at recent low of 4,863.42.

“Currently, we cannot discount lower levels of 4,700 – 4,600 considering external factors and local valuation concerns. We perceive current correction as healthy and a buying opportunity,” it added.