Index volatility remains after fall below 6,200 pointsJune 23, 2013 7:15 pm
Volatility is expected to remain within the local equities market after the Philippine stock benchmark index fell below 6,200 points on global economic uncertainties.
The Philippine Stock Exchange index (PSEi) in the previous week fell three times on the weight of looming “overseas jitters,” as how an analyst put it, overshadowing the three-day rally prior to the correction.
First Grade Finance Managing Director Astro del Castillo said that in the next few days, the market is off to a sideways trend, indicating that the market may fall further if good news won’t appear to please global and local investors’ appetites.
“Moving towards, it seems like the market will remain volatile given the changing investment landscape,” del Castillo said.
He also said that as of now, no specific news is being anticipated by investors and this could trigger more volatility.
“We remain sensitive to the trends overseas. The market may still consolidate within the 6,100 to 6,500 [level],” del Castillo said.
“[The local market is still] considered healthy. Local economy remains strong,” he added.
According to del Castillo, the PSEi going down to the 6,000-point level could only mean opportunities still given strong fundamentals in the market.
Last week, the benchmark index moved sideways to go down to 6182.17, which was still driven by concerns that the United States will taper its Quantitative Easing (QE) in the coming months, unless data on its economy deteriorates. Jonathan Ravelas, BDO Unibank Inc. chief market strategist, cited that other factors that exacerbated the market’s decline was some foreign funds unloading their holdings in the region as well as issues of overvaluation still hovering over the markets.
“Chartwise, a bounce toward the 6,500 levels did occur early on during the trading week, but given the market’s inability to stay above the said levels puts the 6,000 levels at risk,” he explained.
Ravelas, however, said that investors should bear in mind that the market has bled for the last five weeks and appear to be extremely oversold.
“This increases the probability that said levels may hold. If no support appears at the 6,000 levels, this could call for further losses toward the 5,800 levels and give the bears the signal to cross the street,” he said.
Tips to being lazy at work, yet achieving a lot
LEARNING & INNOVATION
Will Zobel brothers take Ayala’s education unit public?
You thanked your hairdresser for that?
‘Political contributions of corporations are illegal’
Is it time for a Philippine ‘Industrial Revolution’?
VIEWS FROM A BRIT