Bargain-hunting seen to lift Philippine stocks

MANILA, Philippines—After last week’s selldown, the stock market may gain some ground this week with the help of bargain-hunters but sentiment will likely remain guarded given threats of another global recession.

The main-share Philippine Stock Exchange index slumped 9.5 percent last week to finish at 3,885.96 on Friday. The index has now pulled back by 15 percent since the record highs posted in early August.

PNB Securities deputy head Manny Lisbona said Friday’s steep drop was evidence that governance problems could not be solved by monetary policy alone.

“While we can expect a technical bounce in the coming days, bearish sentiment will most likely prevail,” Lisbona said. “Long-term investors may start looking for possible buys.”

Banco de Oro Unibank chief strategist Jonathan Ravelas said global investors were shaken by the uncertainty arising from the “twin towers of terror”—referring to the fiscal contagion in Europe and the economic recession risks in the United States.

“Chartwise, the week’s close at 3,885.96 signals that the bears are in control,” Ravelas said.

Ravelas said the market’s near-term support was at 3,800. “A break of this level could call for further tests of the 3,600 levels. Any pullback, if any, is limited toward the 4,000 levels.”

A modest rebound in Wall Street last Friday sets a favorable opening for local stocks this week.

On Friday, the Dow Jones industrial index recovered 37.65 points, or 0.35 percent, to finish at 10,771.48. The broader S&P and the tech-heavy indices were likewise up 0.61 percent and 1.12 percent, respectively.—Doris C. Dumlao