Weak stock trading seen this week | Inquirer Business

Weak stock trading seen this week

/ 04:08 AM February 17, 2020

Local stocks are seen continuing to trade with a bearish bias this week as the new coronavirus contagion continues to worry investors.

Last week, the main-share Philippine Stock Exchange index (PSEi) fell by 3 percent to close on Friday at 7,282.


Having declined by nearly 20 percent from the peak of 9,058.62 recorded in early 2018, PSEi is again nearing bear territory. To confirm the entry to a bearish cycle, the index must stay below 7,250 for two to three months.

BDO Unibank chief strategist Jonathan Ravelas said investor confidence remained “infected by risk-off sentiments arising from the potential economic fallout from the coronavirus.”


“The week’s close at 7,282 highlights [that] bear trades continue to dominate the trading space,” Ravelas said.

After piercing the 7,300 support, Ravelas said the next major barrier would be at 7,000.

Investment house Franklin Templeton said in a research note on Friday that the coronavirus outbreak has had a negative impact on sentiment in the short term.

“Business activity and consumption in China has been significantly impacted as people curtail their movements as a preventive measure. This is expected to result in a materially negative growth print in the short term. Sectors such as travel, leisure, retail and select sub-segments of discretionary consumption are being directly impacted in the near term,” the research note said.

But Franklin Templeton sees the government responding through additional stimulus measures such as further interest rate cuts as well as measures to encourage infrastructure spending or boost consumption.

“While we continue to monitor the situation, we currently believe the long-term growth outlook for China and Chinese equities remain unchanged,” it added. INQ

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TAGS: Business, Philippine Stock Exchange index (PSEi), Stock
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