ILOILO City – The Philippine stock market got battered last week, as it closed the week at 7,598 points, which is around 200 points less than the 7,800 points from previous week.
The market’s poor performance was the result of several factors, including high inflation, a weak peso and poor sentiment among investors. Technical Analyst Hernan Segovia said that the inflation rate – in particular – has had a very problematic effect on the index, causing many investors to become more cautious in their investments.
“The market reacted negatively to the 6.4 inflation rate that has plagued the economy for some time,” Segovia explained. “The market shed around 200 points because of inflation. Fortunately, we are still bullish based on the technical pattern.”
Aside from the Philippine Stock Exchange index, the Philippine peso also suffered last week as it flirted with the P54 to $1 level. Segovia, however, argues that the recent weakness of the peso was caused by emotional pressure, and is not supported by the technical data. He argues that although the peso remains weak, certain technical indicators that measure the currency’s future strength project it to become stronger.
“The peso touched 54, but technically, the peso is showing signs of divergence. So 53 to 54 is emotional and the downtrend is unsustainable,” Segovia said./PN
