Mid East tension to hamper market rebound
![Mid East tension to hamper market rebound](https://media.philstar.com/photos/2024/04/21/7_2024-04-21_18-56-47.jpg)
MANILA, Philippines — Prevailing concerns in the Middle East could impede the stock market’s attempt for a bounce back this week.
Due to heightened tensions in the Middle East, the benchmark Philippine Stock Exchange index (PSEi) finished in the red once more last week at 6,443, down 3.25 percent week-on-week.
Japhet Tantiangco of PhilStocks Financial said the bourse is now near its 6,400 support level and has broken below its 200-day exponential moving average, adding to the bearish technical indications.
“With last week’s drop, the market is now at even more attractive levels. Hence, episodes of bargain hunting could be seen in this week’s trading,” he said.
However, Tantiangco said a strong and sustainable rebound may not be seen yet amid prevailing worries.
He said main concern this week may still be the Middle East tensions, particularly the course of action that Iran would take following the attack from Israel.
“A retaliation by the former may send the market lower. Inflation concerns are also expected to weigh on the market amid inflationary risks at play including rising oil prices, tight energy supply, El Nino’s impact on our agricultural production and weakening peso,” Tantiangco said.
“Finally, investors are expected to watch out for catalysts that could bring back the bullish sentiment,” he added.
2TradeAsia.com in a report said “fickle trading sessions that gyrate with global macro headlines, particularly in the geopolitical space in the very short run,” are seen.
It said oil prices also serve as a wildcard that could put more inflationary pressure in this year’s outlook.
“The PSEi is now just a touch below where it was from its year-end 2023 close. Expect a shift from growth and deployment to capital preservation while risks abound,” 2TradeAsia.com said.
Support is seen at 6,300 to 6,400 level, while resistance is at 6,600 to 6,700.
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