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Business

Market may trade below 6,000 this week

Iris Gonzales - The Philippine Star
Market may trade below 6,000 this week
The Philippine Stock Exchange index fell by 180 points or 2.95 percent to 5,962 week-on-week. All counters weakened, led by services (3.68 percent); property (3.42 percent) and mining and oil (3.23 percent).
STAR / File

MANILA, Philippines — The immediate support of the Philippine stock market is seen at the 5,800 to 5,900 range this week, with resistance at 6,000 at 6,100.

This is according to 2TradeAsia’s commentary on this week’s trading, which is shortened because of the Oct. 30 barangay elections and the Nov. 1 and Nov. 2 non-working holidays.

Last week’s performance, 2TradeAsia said, was affected by the surprise off-cycle rate hike from the Bangko Sentral ng Pilipinas (BSP).

“The benchmark index last week lost the 6,000 psychological support level, following the BSP’s move to raise rates by 25 basis points,” it said.

The Philippine Stock Exchange index fell by 180 points or 2.95 percent to 5,962 week-on-week. All counters weakened, led by services (3.68 percent); property (3.42 percent) and mining and oil (3.23 percent).

Furthermore, 2TradeAsia said last week’s break of the 6,000 psychological support zone is likely an after effect of the shortened trading session and that investor participation would likely resume after the three-day trading break.

Investors are likely to continue accumulating for bargains, 2TradeAsia said.

“A continuity of (last) week’s fall may provide a window for accumulation, given very light volumes behind this downtrend, that may be indicative of low staying power in this zone.”

Not surprisingly, last week’s market volume remained subdued with an average value turnover of P3.27 billion, down by 28.43 percent week-on-week; while net foreign selling widened to P408 million, up by 50.5 percent from the previous week.

RCBC economist Michael Ricafort, for his part, sees the next support level at 5,800 to 5,900 levels with immediate minor resistance at 6,060 to 6,130 levels.

The next gateway or the immediate major resistance could be at 6,180 to 6,240 levels.

Upcoming Philippine economic data could serve as catalysts. These include the latest domestic liquidity growth and bank loans growth due on Oct. 31 as well as the next local policy rate-setting meeting of the BSP on Nov. 16.

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