Market consolidation seen to continue this wk

MANILA, Philippines - The local stock market is seen to remain on consolidation mode this week amid a lack of progress in US “fiscal cliff” negotiations.

With only two weeks to go before the year ends, the possibility of a fiscal cliff deal not taking place until early 2013 is rising, intensifying fears that the world’s largest economy could slip into recession.

The main benchmark index fell 1.5 percent or 87.09 points last week to close at 5,707.11

 “Aside from the omnipotent shadow that the US fiscal cliff has cast over major markets, we do not foresee any catalyst that could reverse the ongoing correction of the local index. Technical indicators show negative divergence for next week, thus supporting the market’s recent movement,” said Abbygayle M. Estrella of AB Capital Securities.

 “The PSEi has stayed for almost two months on the overbought territory that was induced by much liquidity pouring to the local market. We think that the steep climb of the PSEi translates to a healthy correction that we saw this week. The main index will need to take a breather first before resuming its uptrend to new heights,” Estrella added.

Estrella said bargain-hunting may be difficult for investors since blue-chip stocks are already at overbought levels.

She, however, has advised investors to buy on pullbacks in preparation for the year-end window dressing.

The mining and oil index was the biggest gainer last week, rising 5.29 percent.  This was led by Philex Mining Corp. which increased by 11 percent to revert back to the P15 level.

Atlas Consolidated Mining and Development Corp. likewise took centerstage after subsidiary Carmen Copper Corp. declared cash dividends amounting to P1 billion.

Meanwhile, conglomerate JG Summit Holdings Inc. and its property arm Robinsons Land Corp. hit new 52-week highs following the signing of a preliminary deal to with Japanese billionaire Kazuo Okada to jointly develop  $2-billion integrated resort in the Philippine Amusement & Gaming Corp.’s Entertainment City along Roxas Boulevard.