Traders said investors are worried over the possibility of the United States falling into a recession and the still unresolved trade war between the US and China.
KJ Rosales
Market to struggle anew this week
Iris Gonzales (The Philippine Star) - August 19, 2019 - 12:00am

MANILA, Philippines — The  Philippine stock market will likely struggle anew this week, consistent with market sentiment the past four weeks. 

Traders said investors are worried over the possibility of the United States falling into a recession and the still unresolved trade war between the US and China. 

Downside risks remain which may push the benchmark Philippine Stock Exchange index (PSEi) toward the 7,500 level.

“The week’s close at 7,795.98 continues to signal the market to consolidate within the 7,700 to 8,000 levels in the near-term. However, downside risk remains toward the 7,500 levels. If said levels are broken, we could see a retest of the 7,000 to 7,300 levels,” BDO said in a market commentary.

Last week, the market barometer fell by 0.74 percent week-on-week for the fourth straight week to 7,795.98 as fears of a recession in the US plagued investors sentiment both locally and overseas. 

“These tensions stemmed from the escalation in the trade war between the US and China,” BDO said.

Likewise, the local currency weakened by 1.08 percent week-on-week for the third straight week to 52.44 as outflows from local stocks continue unabated and overseas workers’ remittances fell short of expectations. 

“The index will have to take its cues from US markets next week on a lack of clear and major catalysts for the PSEi. Initial support for the meantime would be around the area of its previous intraday lows around 7,620, and the major one would be at May’s low of 7,475,” Gabriel Perez of P2P said.

Piper Chaucer Tan of Philstocks Financials said that weaker trade would be seen this week because of the shorter trading week.

“Trading will be leaning toward sideways and with volatility starting last week due to the global recession fears,” Tan said.

Corporate earnings, Tan added, are mixed double digit results coming from mostly property and banks… may not be enough to pull the market to the 8,000 level.

“Ghost month and overseas fund managers vacation also affects the value flows as weaker value turnover from an average P7 to P8 billion to P5 to 6 billion to date. Emerging market exodus is also a key catalyst and the Philippines did not escape the onslaught...We think that the support of the market for this week will be at 7,790 to 7,810 and the resistance will be at 7,880 to 7,910 for this week’s trade,” Tan added.

PHILIPPINE STOCK MARKET
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