Support seen at 7,600 level this week

MANILA, Philippines — The immediate support for the Philippine Stock Exchange index (PSEi), the local stock market barometer is seen at the 7,400 to 7,600 levels this week, preventing further downward correction in the near future, said an economist at Rizal Commercial Banking Corp. (RCBC).

The stock market has been battered the past weeks amid a host of uncertainties, said RCBC chief economist Michael Ricafort.

“The Philippine Stock Exchange Composite Index (PSEi) posted declines for the third straight week, lower for the fourth week in five weeks, by 114.62 points or 1.5 percent to close at 7,704.60, still among 1.5-month lows and also among four-month lows,” he said.

The market, he noted, has been weighed by some global risk aversion largely brought about by the contraction in US manufacturing gauge to 10-year lows.

The latest US-European Union (EU) trade war that could potentially lead to further slowdown in the global economic growth also added to the uncertainties.

However, Ricafort noted that on Friday, the PSEi strongly gained, by +59.05 points or 2.1 percent after the announcement of the slower-than-expected inflation of 0.9 percent for the month of September 2019.

This was the lowest in three years or since April 2016.

“Thus, further healthy upward correction for the PSEi remains possible for the coming week given the PSEi strong positive reaction to the latest inflation data at a new three-year low that could fundamentally support any further easing of local monetary policy especially if there would be further rate cuts by the US Federal Reserve in the coming months,” he said.

Christopher Mangun of AAA Securities said that if there is no heavy selling this week, there is a chance that the PSEi may end in the green.

He said there might also be some excitement as coconut producer Axelum makes it debut in the stock market today.