Market may rebound this week

MANILA, Philippines — The stock market may experience some recovery this week after the dust of market uncertainties settle, according to 2TradeAsia.com said.

“While attention might sway with current socio political headlines, the timing appears ripe to gradually accumulate on large caps that have already breached attractive buy levels. Remember that recovery follows after the dust settles especially for stocks with solid upside prospects,” it said.

Chris Mangun of AAA Securities said investors may see some recovery this week.

“At the end of the day, there are those waiting to pounce at an opportunity to maximize profits. If we see a decline in selling pressure (this week), we might see bargain hunters come in and pick up shares to turn a quick profit. This may be enough to end the week with gains and possibly stabilize above the 7,700 level as it has done for most of last year,” he said.

Mangun said that retail investors remain optimistic, continuing their selection of companies that they believe would outperform for the year.

Mangun said global equities markets took a beating last week as fears of a global pandemic grip investors. The novel coronavirus which started in the Chinese city of Wuhan has spread to more than a dozen countries with more than 1,000 infected and more than 50 deaths as of the latest reports.

Asian markets were hit harder than its western counterparts as investors are reminded of the economic disruption of the SARS virus back in 2003.

The market barometer PSEi fell by 1.28 percent week-on-week for the third straight week to settle at 7,623.41 on risk aversion as fears over the spread of a new coronavirus could slowdown economic growth globally.

“The slower GDP growth in 2019 at 5.9 percent, the country’s lowest in eight years and below government’s target of six percent to 6.50 percent range also kept investors on the sidelines,” BDO Research said in a commentary.

The week’s close at 7,623.41 highlights some buying support below the 7,500 levels.

Moving forward, BDO said the market may range between the 7,500  and 7,700 level in the near-term.

“However, a significant break below the 7,500 will reinforce previous view calling for a test of the 7,000 to 7,300 levels,” it said.