PSEi enters bear market territory after 4% plunge | Inquirer Business

PSEi enters bear market territory after 4% plunge

/ 12:34 PM September 27, 2022

The Philippine Stock Exchange Index (PSEi) plunged into bear market territory on Tuesday on fears over mounting inflationary pressures, worsened by the damage caused by Typhoon Karding (international name: Noru), while the peso continued to weaken versus the US dollar.

A bear market is typically called after prices decline by 20 percent from the recent peak.

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The PSEi fell as much as 4 percent to 6,000.28 before ending the morning session at 6,020.03, down 3.83 percent. The PSEi was in a bear market at the 6,041 level.

Asian indices were mixed while the Dow Jones Industrial Average closed in a bear market terriory overnight.

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The drop was mirrored in currency trading as the Philippine peso reached a low of 58.99 against the US dollar.

Philippine financial markets reopened on Tuesday after trading was suspended for a day due to typhoon Karding.

Veteran stock market analyst Jonathan Ravelas, who warned of the deteriorating outlook for financial markets early this year, said investors should brace for more pain.

“This could be just the beginning of further declines. Initially, we are looking at 5,500 to 5,700 for the PSEi as the first level,” Ravelas, financial strategy consultant at e-Methods for Business Management Corp., told the Inquirer.

“The hunt for the red October is there,” he added, in reference to the popular Tom Clancy novel and film.

While many first-time pandemic investors have yet to experience a bear market, Ravelas said seasoned participants know these conditions are potential buying opportunities.

“Bear market is really just a technical term. From an investor standpoint, this is your buying opportunity,” Ravelas said.

He advised investors to position in credible dividend-paying companies with attractive valuations.

Click here for more weather related news.

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TAGS: “Bear Market” territory, Inflation, PSEi, typhoon
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