Cautious trading seen

INVESTORS are likely to stay cautions in the coming trading days as indicators suggested the benchmark Philippine Stock Exchange index (PSEi) would continue to decline this week.

The outlook comes as the PSEi slipped almost 1 percent to 7,810.17 last week, partly due to a disappointing report from the factory sector of China, a major trading partner of the Philippines. This suggested “persistent underperformance in the Chinese economy,” said stockbrokerage

firm AB Capital Securities Inc.

“In terms of technicals, the index showed bearish signals [last week] week after failing to stay above the key resistance level at 7,930,” AB Capital said. “Given this, we remain bearish in the near-term as the index may go back at its key support level at 7,700.”

AB Capital, in its report, advised investors “to remain in the defensive and wait for potential reversals before entering back into the market.”

This sentiment was echoed by stockbrokerage firm I.B. Gimenez Securities, which noted that investors would remain cautious despite indications from the powerful US Federal Reserve that an interest rate increase this June would be “unlikely.” Miguel R. Camus