Traders take cue this week from peso movement

The movement of the peso is seen to dictate investor sentiment at the local bourse this shortened week of stock trading amid the holidays.

Philstocks Financial Inc. senior analyst Japhet Tantiangco said traders were on the lookout for the trading of the local currency, which recently hit a record-low of P59 against the greenback.

“A further depreciation of the peso is expected to pose downside risks to the market while a recovery is expected to provide the opposite,” he explained.

While the support line of the Philippine Stock Exchange index (PSEi) stays put at 6,400 level, Tantiangco said the market has yet to “break above its 10-day exponential moving average,” which indicates a downtrend.

“From a fundamental standpoint, the local market has been driven to more attractive levels, giving opportunity to bargain hunters,” he added.

Losing streak

In fact, on Friday, the PSEi ended a seven-day losing streak as investors bought up cheap stocks.

The benchmark index rose by 0.17 percent, or 10.78 points, to close at 6,406.38 while the wider All-Shares index climbed by 0.11 percent, or 4.08 points, to close at 3,675.83.

Investors found some glimmer of hope after the Bangko Sentral ng Pilipinas implemented a third rate cut this year, bringing the interest policy down to 5.75 percent.

Trading is suspended on Dec. 24 and Dec. 25. INQ