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Tuesday, January 21, 2020
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7,600 support level seen for stocks


THE local bourse is seen having an immediate support level at 7,600 this week, as volatility arising from domestic and foreign developments drag market sentiment.

“Amid even tamer inflation, eyes will be on the BSP’s (Bangko Sentral ng Pilipinas) stance on policy, pending the remaining two Monetary Board meetings for the year,” brokerage firm 2Tradeasia said.

Consumer price growth slowed down to 0.9 percent in September from 1.7 percent a month earlier and 6.7 percent last year from lower prices of food and non-alcoholic beverage, the Philippine Statistics Authority reported on Friday.

The latest inflation figure — which was the lowest since the 1.3 percent in June 2016 — fell in the 0.6 percent to 1.4 percent range forecast by the BSP.

The BAP in September cut interest rates for the third time this year by 25 basis points, reducing overnight borrowing, lending and deposit rates to 4 percent, 4.50 percent and 3.50 percent, respectively.

With lower inflation, 2Tradeasia sees more “buffer for doves” in the next monetary policy meetings.

Meanwhile, investors are still on the lookout for developments on the long-standing trade war between the United States and China, 2Tradeasia added.

Recently, the Institute for Supply Management reported that US manufacturing index dropped 1.3 points to 47.8 percent in September as a consequence of the trade dispute. This dragged the US markets on the day the report was released.

“Some might opt to ride-out the volatility by taking profit on crests, but the more prudent will be cherry-picking stocks with defensive growth stories, until the pressure ebbs,” 2Tradeasia said.

The brokerage firm pegged the resistance level at the 7,750 to 7,800 range.

The benchmark Philippine Stock Exchange index surged by 2.11 percent or 159.05 points to finish at 7,704.60, while the wider All Shares barometer climbed by 1.56 percent or 71.50 points to end at 4,675.60 on Friday.

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Today’s Front Page January 21, 2020

Today’s Front Page January 21, 2020