Stock market may drop below 6,000
Share prices are expected to track the downtrend of Asian markets this week, amid concerns over the US Federal Reserve’s plan to reduce the bond buying program later this year.
BDO Unibank Inc. chief market strategist Jonathan Ravelas said the Philippine Stock Exchange index might drop to as low as 5,650 points, if it broke the 6,000 psychological level.
“Chartwise, the index tested the 6,000 level and fell below the 200-day moving average. A break below 6,000 may signal further losses toward the 5,650 to 5,800 levels,” Ravelas said.
He said any pullback would be limited to 6,250 to 6,350 levels.
The PSEi plunged by nearly 6 percent to 6,136.73 on Thursday, the first day of last week’s trading halted by the massive flooding that hit Metro Manila. The stock market followed the movements of Wall Street and the regional markets.
The Philippine Stock
Exchange was closed on Monday and Tuesday because of heavy rains and flooding in Metro Manila and nearby provinces caused by typhoon “Maring” and the southwest monsoon. There was also no trading on Wednesday, which was a public holiday.
The stock index fell to as low as 6,074.02 during the two-day trading week before managing to pare down losses to close the week at 6,161.21 on Friday, down by 5.6 percent from last week’s level.
Accord Capital Equities Corp. trader Justino Calaycay said the release of the second-quarter gross domestic product figure later this week could lend optimism to the market when trading resumed Tuesday. Today is also a holiday.
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