Cautious trading seen

THE LOCAL stock market is seen trading with caution this week as investors await fresh leads and tune in to developments in debt-strapped Greece.

Last week, the main-share Philippine Stock Exchange index (PSEi) lost 86.75 points or 1.1 percent to close on Friday at 7,535.30 ahead of a closely watched austerity vote in Greece, which became the first developed nation to default on an International Monetary Fund (IMF) loan.

Local stockbrokerage AB Capital Securities said its outlook for this week remained “bearish-neutral.”

“In terms of technicals, the index continues to show bearish signals after it failed to breach through the 7,650 level on Thursday (last week). Failure for the index to sustain new highs next week opens it to further downside to 7,300-7,400 level,” the brokerage said.

Citing stochastics as an indicator, AB Capital said the market was also showing bearish signs after previously reaching overbought levels.

“Investors are expected to lighten equity exposure on the identified resistance levels at 7,650-7,700 while key supports at 7,300-7,400 may act as accumulation points,” it said.

AB Capital said investors would likely weigh the results of the Greek referendum yesterday for direction this week. A “yes” vote implies that Greece will accept austerity measures for an international bailout while “no” vote sides with the current government’s position to reject creditors’ conditions. Doris Dumlao-Abadilla