Trading at the Philippine Stock Exchange is expected to remain bearish this week after the index fell below the 7,500-point level last week following the heated US-China trade war.
Regina Capital and Development Corp. managing director Luis Limlingan said investors were still cautious about the Sino-US trade war following news of the US banning Huawei and ZTE from selling in the United States.
With the Philippine Stock Exchange Index dropping to a week low of 7,474.16, Regina Capital sees the market’s next support level toward 7,466.02, which has been the lower limit back in December.
Regina Capital, however, said while all indicators suggested continued bearishness, there was increasing optimism the current support might hold the index after losing over 300 points in the last few days.
Analysts said the 200-basis point reduction in the reserve requirement ratio of universal and commercial banks, seen to boost the economic activity and growth, might propel the PSEi for a rebound.
“The week’s close at 7,583.82 signals there still some room for further decline toward the 7,000/7,300 levels in the near-term. Any bounce is limited to the 7,800 levels,” BDO Unibank Inc chief investment strategist Jonathan Ravelas said.
The PSEi last week dropped to a low of 7,475.16 before closing at 7,583.82, down 2 percent week-on-week.
The broader All Shares Index declined 1.63 percent to 4,713.27 on renewed concerns over the US-China trade war and slower first quarter GDP (gross domestic product) growth.
Except for the property and services, all major sub-indices ended in red led by industrial which fell 4.1 percent, holding firms which declined 3.8 percent, financials which dipped 2.2 percent and mining and oil which lost 0.9 percent.
Foreign investors were net sellers by P5.8 billion, while the average daily value traded stood at P8.98 billion from the previous week’s P7.11 billion.
Weekly top price gainers were Asian Terminals Inc., which surged 23.6 percent to P19.88; Chelsea Logistics Holdings Corp., which advanced 8.7 percent to P6.39; and Lopez Holdings Corp., which gained 6.3 percent to P4.70.
Weekly top price losers were led by Jollibee Foods Corp., which declined 8.5 percent to P277; Petron Corp., which dropped 7.9 percent to P5.5; and JG Summit Holdings Inc., which retreated 7.3 percent to P57.
Wall Street, meanwhile, finished a topsy-turvy session in the red Friday amid worries over US-China trade talks, while the pound fell to multi-month lows on renewed prospects of a no-deal Brexit.
US investors reacted negatively to media reports that described talks between the US and China as stalled following the White House’s move this week to block Chinese telecommunications company Huawei from the US.
That drew more confrontational rhetoric from Chinese government officials.
“It feels as though further discussions on trade have been put on hold,” said Art Hogan, chief market strategist at National Securities.
“Today it seems the door is shut” to further talks, he added. With AFP