Traders seen facing ‘a lot of negativity’
Further stock market declines are likely following last week’s plunge, analysts said, with investors said to be looking to limit their losses with the Philippine Stock Exchange index (PSEi) already in bear territory.
The benchmark index touched the 6,900 level on Friday but managed to trim its losses to close at 7,063.20, down 0.49 percent or 34.95 points from the previous day but also 22.02 percent lower from its January 29 record peak of 9,058.62.
The wider All Shares dropped 0.51 percent or 22.15 points to finish at 4,347.06.
Traders will be going into this week “with a lot of negativity,” Eagle Equities, Inc. research head Chris Mangun said.
“Based on a technical aspect, the next support is at 7,000 and if that is broken we may see it go down to 6,800 which is a 25 percent correction from the [intra-day] high of 9,070 back in January,” he added.
“Investors are in panic mode right now, selling off any open positions that they had as they assumed they could hold on while the market corrected.”
Another scenario, Mangun said, would be sideways trading with investors trying to scoop up issues on the cheap.
“If not, we will continue to see a sell-down and test support at lower levels,” he added.
Mangun said investors should look for opportunities in tier two stocks and stay away from blue chips while waiting for second quarter corporate earnings and economic growth results.
Timson Securities, Inc. trader Jervin de Celis, meanwhile, said the market could see a recovery if global trade tensions start easing.
Markets worldwide were hammered after more economies announced retaliatory tariffs against the United States, which has adopted a protectionist stance over alleged unfair trade practices by its allies.
With regard to local developments, de Celis said the PSEi could also “find support when we see developments in the second package of the Train bill as well as the groundbreaking of some infrastructure projects this year.”
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