Weaker PH trading seen
The local stock market is seen to continue trading with a downward bias this week on jitters over the fragile economic recovery in the United States alongside escalating tension in the Korean peninsula.
Last week, the main-share Philippine Stock Exchange index lost 123.33 points, or 1.8 percent, to close at 6,727.14 on Friday as threats of war from North Korea and concerns ahead of the release of a crucial US jobs data weighed down on regional markets.
On Friday night, the latest US data confirmed what the markets feared days before its release: American employers added only 88,000 new jobs—less than half of what was expected by the market. This also marked the fewest job creation in nine months.
“Chart-wise, the recent break of the 6,750 (support) levels implies further tests toward the 6,500-6,600 levels in the near term,” said Jonathan Ravelas, chief strategist at Banco de Oro Unibank.
Abbygayle Estrella, an analyst at AB Capital Securities, said that for the coming week, the PSEi might move lower as the focus would shift “from the lack of local catalysts to geo-political tensions abroad.” In this regard, she said investors must preserve their profits as this week’s sessions could be “playing on the blind slide.”
Estrella said technical indicators were neutral as the relative strength index was flat with a downward bias.
AB Capital Securities sees the PSEi’s support and resistance levels at 6,640 and 6,950, respectively. Trading will also be shortened this week as April 9, Tuesday, is a non-working holiday in observance of “Araw ng Kagitingan.”
Estrella said that apart from digesting the US jobs data, the markets would await the release of the third Federal Open Market Committee (FOMC) minutes for the year.
“A failed attempt to break 7,000 signifies the strong, psychological resistance for the PSEi. Being the first to raise its credit outlook on the country, the effect of Fitch’s investment rating upgrade was short-lived because the market has been factoring it since last year. This, countered by the jitters from North Korea, had reverted the main index to 6,700 from its sudden rise to 6,900,” she said.—Doris C. Dumlao