Listed companies need to beat earnings estimates if the Philippine Stock Exchange is to reach the 8500 level this year, an analyst said on Wednesday.
RCBC equity analyst Jeffrey Lucero said if companies post 3rd quarter earnings that are just in line with estimates, the market is unlikely to rally because investors have already factored in these estimates.
Lucero also warned that the market will have a huge negative reaction if earnings disappoint.
"If we see, however, (earnings that are) below estimates (and) expectations, then the market drop severely. Maybe the 8100 (level) support won't even hold," Lucero said.
The PSEi closed at 8,365 on Monday October 30.
Meanwhile, the stock market is likely to see some profit-taking when trading resumes Thursday, according to Gus Cosio, president of First Metro Asset Management Inc.
Cosio said he expects to see some correction and a bit of window-dressing on Thursday.
"Some of the spikes were quite hefty so there should be some profit taking tomorrow," Cosio said.
He added that investors will be keeping an eye on US President Donald Trump's announcement of the next US Federal Reserve Chairman.