Market seen at 6,400-6,600 range

MANILA, Philippines — The Philippine stock market is still generally experiencing a stubborn streak and not even the generally positive first quarter corporate earnings results could convince enough investors to stay in the market.

As such, 2TradeAsia sees the benchmark Philippine Stock Exchange index’s (PSEi) immediate support at 6,450, with resistance at 6,600 to 6,700.

Last week, the PSEi slipped by 18 points to 6,512.01 or down 0.28 percent week-on-week.

However, average turnover improved by 62 percent to P8.52 billion but foreigners turned net sellers at an average of P870 million compared to the P475 million net foreign buying the prior week.

“Capital markets enjoyed a fairly buoyant close of May after Washington successfully staves off possible default, owing to the US Congress passing to suspend the debt ceiling. While we do not expect this to fully dictate direction over the next few sessions, this should provide the US fiscal policy some legroom over the next two quarters, which is when a GDP contraction is expected per consensus,” 2TradeAsia said.

Juan Paolo Colet, managing director at China Bank Capital Corp., said the market would try to find its footing in the 6,400 to 6,600 zone following last week’s volatility and large foreign outflows.

He said the lifting of the US debt limit for two years has removed a major overhang on equity markets and gives a temporary shot of optimism.

“Locally, investors will now turn their focus on Philippine May inflation data scheduled for release on June 6. A favorable inflation print, especially one that is below expectations, could encourage a recovery in the PSEi,” Colet said.

Aside from this, he added, investors would also weigh the outlook for US interest rates in view of mixed signals on whether the Federal Reserve will skip a policy rate hike this month.