Stock slump seen to persist

Local stock investors see no relief in sight for the market after five consecutive weeks of decline, mostly due to local inflation jitters.

Last week, the main-share Philippine Stock Exchange index (PSEi) fell by 198.62 points, or 2.73 percent to close at 7,078.20 amid thin trading turnout.

Net foreign selling last week amounted to P2.62 billion as foreigners remained net sellers for the 30th straight session, Eagle Equities Inc. head of research Christopher Mangun said in a research note.

“The index failed to close above the 7,200 support level, which means the bottom that we saw back in July may not be the bottom that we had hoped for,” Mangun said. “Next key support level is at 7,000, and if that doesn’t hold, there is no telling how low this market can go.”

As an alternative, Mangun said the PSEi could hold fort at 7,000, resulting in a “double bottom” or a technical formation that will suggest a rebound.

But looking at the market sentiment, Mangun said the market seemed to be leaning toward the first scenario, whereby the PSEi would continue to fall.

The PSEi has now been in bear territory, having pulled back by more than 20 percent since hitting a record peak last end-January.