Market wary of global woes

Local stocks are expected to be traded with caution in the days ahead as global growth woes weigh down regional markets, but bargain-hunting may provide some relief.

Last week, the main-share Philippine Stock Exchange index lost 79.68 points, or 1 percent, to close at 7,167.35 on Friday.

This week, the market will likely open with a bearish bias given the sharp decline in US stocks, said Joseph Roxas of Eagle Equities Inc.

“But it’s a buying opportunity. October is always down—best buying opportunity in athe year,” Roxas said.

The 7,100 barrier, Roxas said, would provide a “very strong” support to the market.

Jonathan Ravelas of Banco de Oro Unibank said the local stock barometer was generally tracking Wall Street which, in turn, was dragged down by concerns that the slowing growth in Europe would hurt the American economy.

On Friday, the Dow Jones Industrial index was down by 115.15 points.

“Chartwise, the index broke below 7,200, but is still trading within the medium-term uptrend channel,” Ravelas said.

As stocks closed below 7,200, “prices remain vulnerable and may test the 7,000 level. However, similar to what we have seen in the previous weeks, it is likely that bargain hunting could ensue this week, which could put the index back to the 7,200-7,400 range,” Ravelas said.

On the foreign exchange market, Ravelas said the peso would continue to trade between 44.60 and 44.90 against the US dollar in the week ahead.

The local currency closed last week at 44.77 against the previous week’s 44.75:$1. Doris C. Dumlao