Cautious trading seen

The local stock market is seen to continue trading with caution in the absence of fresh catalysts and as the P19.5-billion initial public offering of Pilipinas Shell Petroleum Corp. begins this week.

Last week, the Philippine Stock Exchange index fell by 2.49 percent to 7,389.30 as emerging markets braced for a likely hike in US interest rates.

“The week’s close below the 7,500 levels for the first time since May 27 implies there is still some room for further weakness toward the 7,000-7,200 levels,” said Banco de Oro Unibank strategist Jonathan Ravelas.

“The price rebound toward the end of the trading week hints the week’s low of 7,312.18 could be a near-term bottom.”

Luis Gerardo Limlingan, managing director at Regina Capital Development, said the first two trading days would be crucial this week as the PSEi strives to stay afloat the 200-day moving average.

But the main hurdle is the index’s high-volatility environment, as based on its 14-day average movement of 85 points, the support level could be easily breached, Limlingan said.  —Doris Dumlao-Abadilla