Philippine equities are expected to remain under pressure this week, with the benchmark index trading at levels last seen during the pandemic as domestic and international headwinds continue to weigh on sentiment.
“The local market is still on a decline as negative developments sustain the bearish sentiment. The bourse is now trading at levels last touched during the pandemic,” said Japhet Tantiangco, research head for Philstocks Financial Inc.
Tantiangco noted that the market’s “bearish default” is likely to persist this week. Investors continue to grapple with lingering corruption issues in the Philippines, coupled with weak confidence following a dismal third-quarter gross domestic product (GDP) report and poor foreign investment data.
“The bourse could move down further as investors continue to contend with the lingering corruption issues here in the Philippines,” he said.
External factors may also contribute to the cautious mood, including worries over artificial intelligence stock overvaluation and fading hopes for U.S. Federal Reserve interest rate cuts.
“A strong positive catalyst is deemed needed to reverse the market’s current direction,” Tantiangco said.
From a technical standpoint, the outlook remains downbeat.
The local market has broken below the 5,600 level, which is considered support. If the market is unable to recover above that line, the immediate resistance is the previous support level, and the next support is seen at 5,400, according to Tantiangco.
Last week, the Philippine Stock Exchange index (PSEi) plunged by 3.04 percent to close at 5,584. New developments in government corruption issues reignited negative investor sentiment.
Average value turnover reached P6.85 billion. Foreign investors remained net buyers, with total inflow for the week at P272.7 million.
