Market downturn presents opportunities to hunt for bargains
![Market downturn presents opportunities to hunt for bargains](https://media.philstar.com/photos/2024/04/14/3_2024-04-14_19-03-25.jpg)
MANILA, Philippines — Investors are expected to seek out bargains this week following the stock market’s recent slump.
The benchmark Philippine Stock Exchange index fell for a seventh consecutive session last Friday at 6,659.39, down by 1.28 percent week-on-week.
Analysts said the stock market is in need of a major catalyst to stop the bleeding.
“The local market turned more bearish as it breached the 6,700 level last week, a line considered as a support. The local market is now on a seven-day losing streak, trimming its gains for the year to 3.25 percent,” Japhet Tantiangco of PhilStocks Financial said.
Tantiangco said the local market is currently at a price-to-earnings ratio of 13.3x, lower compared to its 2019 to 2023 average of 18.2x.
“Hence, next week, we may see episodes of bargain hunting. However, worries over the Philippines’ inflation and interest outlook are expected to persist which in turn may continue to weigh on the market. This comes amid the mounting inflationary risks which raises the possibility of a delayed rate cut by the Bangko Sentral ng Pilipinas,” Tantiangco said.
“Concerns over the possibility of a delayed rate cut by the Federal Reserve amid the US’ inflation picture may also dampen sentiment. Hence, for next week, we may see sideways movement from the local bourse,” he said.
In a report, 2TradeAsia.com said the probability of an extended downtrend past 6,500 should warrant extra caution in trades.
It said any stabilization above the 6,600 level would open windows for short-term range trading, at least while the broader market rationalizes capital cost outlook for the remainder of the year.
Market support is seen at 6,400 to 6,500, while resistance is at 6,700 to 6,800.
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