Stocks may hold on to gains as mart awaits leads

Philippine shares are expected sustain their upward trend this week, but the lack of strong catalysts could prevent the market from rising further, analysts said.

The Philippine Stock Exchange index (PSEi) improved by 29.45 points or 0.44% to end at 6,643.18 on Friday, while the broader all shares index rose by 10.85 points or 0.31% to close at 3,506.61. 

Week on week, the PSEi climbed by 13.54 points or 0.2% from its 6,629.64 close on Jan. 5.

“The local bourse held on to slight gains while waiting for stronger catalysts to reinforce the market’s upward momentum,” online brokerage firm 2TradeAsia.com said in a market report.

“The PSEi gained for the second straight week of the new year, higher for the fourth week in five weeks, somewhat catching up with the much larger gains posted by the US and other global stock markets since 2023,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Philippine shares could continue to rise this week, Mr. Ricafort said.

“The upward trend in the PSEi could continue after rising for almost all days from the start of 2024… amid the recent gains in the US stock markets to among two-year highs and near record highs,” he said.

On Friday, Wall Street stocks closed nearly flat after moving between modest gains and losses during the session, Reuters reported. The Dow Jones Industrial Average fell 118.04 points or 0.31% to 37,592.98. The S&P 500 gained 3.59 points or 0.08% at 4,783.83; and the Nasdaq Composite rose 2.58 points or 0.02% to 14,972.76.

The US market will be closed on Monday for the Martin Luther King, Jr. holiday.

“Investors are expected to watch out for positive catalysts. Without such, sustaining the market’s climb [this] week could be difficult. Meanwhile, the dampened Federal Reserve rate cut hopes following the US’ December 2023 inflation print and worries over the tensions in the Middle East may weigh on sentiment,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message that the market’s movement will be “data dependent,” with the PSEi expected to consolidate at the 6,600 level.

“Some key economic events this week will be China’s gross domestic product, US consumer sentiment, and retail sales [data],” Mr. Limlingan said.

Meanwhile, Mr. Ricafort put the PSEi’s immediate minor support at 6,390-6,500 and immediate major support at 6,210-6,300, while Mr. Tantiangco placed its major support at 6,400 and major resistance at 6,700.

For its part, 2TradeAsia.com put the PSEi’s support at 6,550 and resistance at 6,700-6,800.

“[The] PSEi is building a clearer technical runway towards 6,800… In the short term, improving macroeconomic factors plus confirmation of earnings should lubricate the ascent and provide opportunities to day range trade,” the online brokerage said. — R.M.D. Ochave