As the stock market resumes trading after a long weekend break, investors are seen to continue taking their cue from volatile global markets.
Last week, the Philippine Stock Exchange index tumbled by 180.17 points or about 2.5 percent to close on Friday at 7,098.81. Although the barometer recouped some of the losses in the last four sessions, it was still not enough to wipe out the impact of the 6.7 percent decline last Monday, during a global stocks meltdown.
“Similar to Wall Street and other Asian markets, the Philippine stock market experienced a bloodbath at the start of the week on lingering concerns over the slowdown in China’s economic growth. The index fell to as low as 6,603.19 before bargain-hunting and China’s easing of its monetary policy allowed it to recoup some of its losses,” BDO chief strategist Jonathan Ravelas said.
In addition, Ravelas said news on Philippine second quarter gross domestic product growth of 5.6 percent—which was close to the consensus forecast of 5.7 percent and better than the 5 percent growth seen in the first quarter —had provided support to the market.
“Chartwise, the index fell to the 6600 levels but managed to bounce back to the support—turned-resistance 7,000 mark,” Ravelas said.
“Expect the market to range between the 6,900-7,200 levels in the week ahead. A close above 7,250 could signal a near-term bottom at 6,600,” he said.
In the meantime, the peso also weakened last week to 46.735 from the previous week’s 46.50 to the US dollar as the latter strengthened on positive US economic data. US GDP expanded by 3.7 percent year-on-year in the second quarter, beating consensus forecasts. 46.735, weaker than last week’s close of 46.50.
“Chartwise, expect the peso to range between the 46.60 to 46.90 levels in the week ahead,” he said. Doris Dumlao-Abadilla