The stock market this week is expected to remain vulnerable to volatile developments abroad.
Last week, the main-share Philippine Stock Exchange plunged by 5.4 percent, or 278.72 points, to close at 4,879.42 on Friday as a fiscal contagion threatens to break up the eurozone.
“Investors might [extend] their ‘wait-and-see’ mode prior to repositioning in global equities, until the political picture in Greece clears. Supply might still run high on intraweek ascents, given the PSEi’s 8.4 percent decline from a peak of 5,329 (on May 4) to 4,879 (on May 18),” said Freya May Natividad of 2TradeAsia.com.
“For now, speculative shares might be highlighted, especially those that glide well with uncertainties,” she said.
The strategy for now would be to trade cautiously and within a range, Natividad said, adding that immediate support would be at 4,800 and resistance at 4,900-4,950.
Where the PSEi is heading this week will be determined by events in Europe, said Maria Arlysa Narciso of AB Capital Securities.
“With the uncertainty, whether Greece will stay or leave the European Union, its impact will definitely create another ripple effect (affecting) global markets and economies. The European Central Bank has already announced it will discontinue providing liquidity for Greek banks. The withdrawal of this financial support might spell the demise of Greece. If, over the weekend, a solution is not made, we may find ourselves declining further,” Narciso said.
She said the PSEi’s week-long pullback may be the correction the market had been waiting for after its sharp rally in the first quarter.—Doris C. Dumlao