Bargain-hunting seen giving index a boost

TRADING FLOOR Inside the Philippine Stock Exchange Tower in Bonifacio Global City — PSE FILE PHOTO

The local bourse is looking more attractive this week, with traders hunting for cheap stocks likely to give the benchmark stocks index a boost, albeit only a slight lift.

After briefly entering the bull market, the Philippine Stock Exchange Index (PSEi) has plunged by more than 13 percent from its recent high.

It closed at 6,676.65 on Friday, down by 4.3 percent week-on-week, representing its deepest dive in the last month.

“The market’s four-week fall has brought it to even more attractive levels, opening the possibility of bargain hunting in [this] week’s trading,” said Japhet Tantiangco, research head at Philstocks Financial Inc.

At the same time, Tantiangco pointed out that the weak peso may still pull down the PSEi toward the 6,400 level, which it has not touched since Aug. 6.

He also noted that the rise of US treasury yields may strengthen the dollar further versus other currencies as it becomes more attractive to global investors.

Tantiangco sees the market’s resistance level at the 6,700 to 6,800 range.

Trading platform 2TradeAsia.com likewise noted that a rally may not yet be seen in the near-term considering global uncertainties, including Donald Trump’s impending comeback as the president of the world’s largest economy.

2TradeAsia advises traders to “look toward oversold shares for rebound plays in the short/medium term.”

It sees the market’s immediate support level at 6,550 and resistance at 7,000.