Bargain hunting seen to continue this week

The local bourse is seen headed for an upswing as investors continue looking for cheap stocks this week but the weakening currency may also spook them to remain on the sidelines.

Philstocks Financial Inc. senior research analyst Japhet Louis Tantiangco said the Philippine Stock Exchange index (PSEi) was well-positioned to spur bargain-hunting after registering a new year-to-date low of 6,341.54 last week.

“Given its attractive position, we may see some bargain hunting in the local market [this] week,” he said.

However, “the local currency which has been a concern last week, if it continues to weaken, poses downside risks to the bourse,” Tantiangco added.

Peso has been recently trading at the 58-level against the greenback, marking nearly a two-year low for the local currency.

Apart from foreign exchange, the analyst noted that investors would also watch out for the release of May inflation data.

Tantiangco said that should inflation breach the upper end of the government’s 2 percent to 4 percent target range, investor appetite could weaken as a result.

Inflation sped up to 3.8 percent in April from 3.7 percent the month earlier.

Tantiangco pegged the support level at 6,400.

“If the said level holds, the market’s trading range is still seen from 6,400 to 6,700. If it does not, however, the market’s next support is seen at 6,150,” he explained.

On Friday, the benchmark PSEi inched up by 0.96 percent, or 61.35 points, to close at 6,433.10, while the broader All-Shares index climbed by 1.12 percent, or 38.30 points, to settle at 3,463.87. —Tyrone Jasper C. Piad INQ