Index may drop further

MANILA, Philippines — Share prices may decline further beyond the 6,000 level this week, according to Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort.

Immediate support is expected at the 6,000 to 6,100 level versus further downward correction and profit-taking, while major support is seen at 5,850 level, which keep the underlying upward trend/rally over the past 1.5 months intact, Ricafort said.

Last Friday, the Philippine Stock Exchange index (PSEi) corrected slightly higher by 4.80 points to close at 6,197.38.

“The higher new COVID-19 cases locally, in some US states, and in some countries partly triggered the recent healthy profit-taking in the local, as well as global stock markets,” Ricafort said.

For the week, the PSEi declined by 175.28 points.

In all, since the start of 2020, the PSEi tumbled by 1,671.88 points or 20.7 percent.

“Major leads for the local financial markets include the latest trends in new COVID-19 locally and in some countries, any further government moves to ease restrictions on business and economy, as well as the latest data on GIR and OFW remittances,” he said.

Ricafort, meanwhile, said there are also external factors that would affect the stock market’s behavior this week.

“Important leads include any further positive developments on COVID-19 vaccine, any improvement in US and global economic data in view of further reopening of economies from lockdowns that recently supported the recent gains in the US global stock markets,” Ricafort said.

Meanwhile, optimism returned to Wall Street on Friday, and stocks rallied to cap a shaky week dogged by worries that rising coronavirus counts may halt the economy’s recent upswing.

The S&P 500 climbed one percent, and the biggest gains came from cruise ship operators, airlines, banks and other companies that most need the economy to continue to reopen and strengthen.