AFTER BREACHING the psychological resistance of 8,000 points, the Philippine Stock Exchange index (PSEi) is expected to track second-quarter corporate earnings, with sentiment to be affected by the traditional window-dressing as investors welcome the “ghost month” and also the Federal Reserve’s dovish stance.

The bellwether PSEi ended at 8,071.47 on Friday, up 81.74 points from July 21’s close of 7,989.73.

Most sectors finished in positive territory as investors gained confidence from President Rodrigo R. Duterte’s State of the Nation Address and the Federal Reserve’s decision to maintain interest rates at its meeting last week.

Value turnover reached P6.52 billion, 4.5% lower than the average of the prior trading week, with losers trumping advancers at 110 to 95.

Net foreign inflows stood at P521.03 million, up from the preceding week’s average of P125.23 million

Philstocks Financial, Inc. noted that even as the PSEi finally breached the 8,000 mark last week, the market still did not see the surge that usually follows suit after surpassing resistance.

“Except for a brief foray to the 8,100-level in intraday trades Thursday, the weight of sellers that show up at current levels remain quite a challenge,” Philstocks Financial said in its weekly market outlook report, noting that trading may maintain momentum on the back of traditional month-end window-dressing and also ahead of what investors dub as “ghost month,” a period in the Lunar calendar when some Asian investors refrain from doing big investments or decisions that coincides with the vacation of fund managers in the West, thereby resulting in lower trading volumes.

“[O]ptimism is keenly keeping an eye on corporate profit reports expected to begin rolling out [this] week — with the bulk, including those of the “heavyweights” coming in approaching midweek of August,” it added.

Online brokerage noted that investors will be closely watching earnings results of index movers such as BDO Unibank, Inc.; Aboitiz Power Corp.; Aboitiz Equity Ventures, Inc.; Manila Electric Co.; and Metro Pacific Investments Corp.

It also noted that investors will be testing the continuity of the local bourse’s rally while anticipating the implementation of the initial phase of the Tax Reform Acceleration & Inclusion program, expected within the quarter or the next.

Immediate support is at 8,030 to 8,050 and resistance at 8,150 to 8,200, which if reached will land the index at a new record high from the current 8,127.48 point-level logged on April 10, 2015, it said.

On Wall Street, the S&P 500 slipped on Friday on negative reactions to earnings reports from high-profile names.

The Dow Jones Industrial Average rose 33.76 points or 0.15% to 21,830.31; the S&P 500 lost 3.32 points or 0.13% to 2,472.1; and the Nasdaq Composite dropped 7.51 points or 0.12%to 6,374.68. — JCL with Reuters