Market may turn cautious over ‘Brexit’ vote

LOCAL stocks may pull back this week as investors turn cautious over a vote on whether Britain would stay within the European Union.

“It is widely assumed that an exit from the EU would be destabilizing to the global economy,” AB Capital Securities Inc. said in its weekly outlook report.

The benchmark Philippine Stock Exchange Index gained 1.49 percent to 7,622.07 last week. This was after the powerful United States Federal Reserve decided not to raise interest rates for June, helping boost appetite for risky investments like equities.

AB Capital said the PSEi could pull back to the 7,500 to 7,550 levels this week ahead of the next “Brexit” referendum. Citing technical indicators, AB Capital noted that July would still be “mostly positive” for the market.

“However, we expect a correction in August as bulls get exhausted,” it said.  Miguel R. Camus