Market may retreat down to 7,360 this week

The stock market may retreat all the way down to 7,360 this week unless some new catalyst comes out, traders said.

The market does not hold to the 7,800 level due to the dismal economic figures, said Piper Chaucer Tan, research associate at Philstocks Financials.

He said the Turkey crisis would not have a significant effect on Philippine markets, but the economic figures are still a drag.

“We expect this week that the volume on the market will be significantly low due to the ghost month jitters,” he said.

The earnings might be the positive catalysts for the market despite negative impact of inflation mostly on food and beverage business.

“We saw the market rally and take profit. We expect to hold to 7,500 to 7,700 if it doesn’t hold, we view a resistance at 7,250,” Tan said.

Christoper Mangun of Eagle Equities said this week is going to be a make or break situation for the PSEi. “Support is still at 7,530, but if it can’t hold this line, then we may see it come all the way down to 7,360. With only four trading days next week, we are expecting to see lower volume. However, local investors may treat this as a buying opportunity as several blue-chips have pulled back last week. If this happens then we may see the index go sideways or even gain a little. The index is currently down only one percent for the month of August.”

He said retail investors are going to continue to look for more opportunities in second-liners as the main index is still in limbo.

“The meltdown of the Turkish lira has sent disruptive waves across global markets. The PSEi ended lower which was to be expected. Value turnover was below average last week at P26.53 billion. The index came all the way down and even broke below our second support at 7,530 on several occasions,” Mangun said.

A spike in foreign outflows also was a factor last week, he added, with net foreign-selling at an enormous P4.72-billion.