The Philippine stock market started off strong last week, but some investors opted to take profits from the bourse, pushing the benchmark index lower to 6,379, down 1.38 percent week on week.

It was a sea of red as most indexes fell too, and value turnover was thin at an average of P3.12 billion or down 37.54 percent year on year as foreign investors dumped their shares, with average net foreign selling at P82 million compared to P351 million the prior week.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the main index also declined recently after US stock markets mostly corrected lower last week.

'The Philippine Stock Exchange index also corrected slightly lower after higher US Treasury yields, with the 10-year tenor at 4.04 percent, new four-month highs, or since March 3, amid hawkish Fed signals recently and after mostly stronger-than-expected US economic data recently that could support future Fed rate hikes, as the markets recently priced in a possible 0.25 percent Fed rate hike on July 26, that could be matched locally, after hawkish signals by the Fed,' he said.

He sees the next support level for the index at 6,330.97.

Unicapital Securities, for its part, said that with macroeconomic headwinds continuing to challenge medium term prospects and limiting upsides above 6,500, inexpensive valuations likewise substantiates formidable support at the 6,400 levels.

'In the near-term, we recommend accumulation between the 6,450 and 6,350 support levels,' Unicapital said.

2TradeAsia said the market started the second semester 'underwhelming, plagued by old uncertainties and lack of fresh leads.'

' Our sector selective strategy is sustained, ahead of MSCI rebalancing and annual ghost festive in August.'

'Stay selective while waiting for turnover to thicken over the next few weeks -- upcoming first half earnings might provide the much needed electric touch,' it added.

Moving forward, 2TradeAsia sees immediate support at 6,300, with resistance at 6,600.

 

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