Advertisement

PSEi seen range-bound on geopolitical concerns

Font Size

STOCKS will continue trading within range this week amid continued geopolitical tensions offshore.

The Philippine Stock Exchange index (PSEi) edged up 0.02% or 1.84 points to 7,958.57 on Thursday, the last day of the three-day trading week.

Week on week, however, the bellwether index was lower by 0.71% or 56.57 points from its 8,015.14 finish last Aug. 25.

The all-shares index likewise gained 0.03% or 1.27 points to 4,723.27 on Thursday, but was down 25.79 points or 0.54% week on week.

The market saw an average value turnover of P7.8 billion, while purchases by foreign investors stood at P117 million.

“Shares scored lower during the 3-day trading week, as sentiment went on a roller coaster ride from NoKor’s (North Korea) weekend missile test to Hurricane Harvey’s devastation in Texas that affected roughly 20% of US refining capacity,” online brokerage 2TradeAsia.com said in a market note.

Last week, North Korea fired a ballistic missile that passed over northern Japan’s Hokkaido island, causing investors to flock to safe-haven assets.

On Sunday, North Korea said it successfully tested an advanced hydrogen bomb, marking a dramatic escalation in the isolated state’s stand-off with the US over its nuclear weapons program.

Japanese and South Korean officials said an earthquake detected near the North’s test site was around 10 times more powerful than previous detonations, and concluded the North had conducted its sixth nuclear test.

It was the North’s first nuclear test since US President Donald J. Trump took office, and marked a direct challenge to Mr. Trump, who hours earlier had talked by phone with Japanese Prime Minister Shinzo Abe about the “escalating” nuclear crisis in the region.

North Korea said in an announcement on state television that a hydrogen bomb test ordered by leader Kim Jong Un was a “perfect success” and a “meaningful” step in completing the country’s nuclear weapons programs.

2TradeAsia.com said that for this week, investors will be looking at news that can either positively or negatively impact the economy.

Markets will likely react to Pyongyang’s latest move when trading opens today. Other potential drivers of trade this week include Philippine August inflation data due for release tomorrow and the European Central Bank’s monetary policy meeting on Thursday.

“All indicators are slightly bearish at this point and momentum has slightly weakened. The ATR (average true range) is showing an upward trend, hence, expect the market to be more volatile in the coming weeks,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile phone message.

Analysts pegged the PSEi’s immediate support within 7,870 to 7,900, while resistance is at 8,000. — A.B. Francia with Reuters

Advertisement