Stocks seen to consolidate

MANILA, Philippines — The stock market may consolidate further this week as investors await signals including first quarter corporate earnings, said ATR Asset Management head of research Jomar Lacson.

“We will likely keep within a range of 7,700 to 8,000 amid unclear market signals,” Lacson said.

Christopher Mangun of Eagle Equities said the main index has held support at 7,840 for the last two weeks on the daily chart, but could not break above resistance at 8,000. 

“Investors may continue to sit on the sidelines as we go into the holiday season and maybe wait as long as after the election in May. Because of this, we may continue to see the index go lower. The next major support is at 7,800 and then 7,600,” he said.

Mangun said retail investors would continue to trade second-liners and speculative stocks which has been the trend for the last few weeks. 

Furthermore, he said the general investors sentiment has gone from cautious to extremely cautious as investors are probably anticipating an event that would be negative for the market or possibly waiting until the end of an event that could go either way. The event could be the coming elections in May, or it could be something else. 

The bottom line is local investors are staying away indefinitely and this will cause the market to go lower, Mangun said adding that these are short-term concerns. 

Global equities  markets ended last week with stronger performances although the Philippine Stock Exchange bucked the trend.

The main index ended the week lower as inflation numbers, which came in at the lower end of the government’s target range, failed to improve investor sentiment. 

“Trading volumes also dropped significantly this week with turnover value at P22.67 billion. This marks the weakest week of trading in terms of trading value since the beginning of the year,” he said.

Despite lower volumes, foreign money continues to flow back in with foreign net-buying at P2.86 billion for the week. The PSEi would be trading at lower levels if not for all the foreign money that has been supporting the market. 

In all, Mangun said local investors have been sitting on the sidelines for several weeks already.