MANILA, Philippines - Local stocks are expected to suffer from bearish market sentiments this week on continued concerns in international markets.
Share prices would continue to trade sideways with a downward bias, AB Capital Securities Inc. analyst Joyce Ramos said.
“Based on technical indicators, the market is showing weak signs for the coming week,” Ramos said, citing the slowing markets in the US and concerns over weakening demand for oil globally.
Ramos placed support level at between 7,100 to 7,150, while resistance is pegged at 7,300.
Last week, the local stock market succumbed to profit-taking, finishing three of four trading sessions in the red. The sluggish performance was mainly brought about by the IMF’s decision to lower its global growth outlook for the year.
On Friday, the benchmark index closed 0.48 percent or 34.54 points lower at 7,167.89. Week-on-week, the Philippine Stock Exchange index (PSEi) dropped 1.1 percent or 80 points.
“Attention might shift between US and Europe for now, especially after the latter hinted of weak domestic growth. As mentioned, the extent and depth of the Euro zone’s bond purchases will be trailed, plus responsiveness of demand via labor market data. Calls to uphold policies would be favored, supporting corporate earnings growth in the process,” said Jason Escartin, investment analyst at 2tradeasia.com.
“The other perceived saving grace is that crude futures pricing would remain subdued, with the assurance supply will be enough against demand growth expectations. Sans weather-related disturbances, this would help limit cost-push inflation variables, consequently, higher real return on investment,” he added.
Escartin, for his part, said immediate support is at 7,100 and resistance at 7,250 to 7,300.