Index may trek upward this week

MANILA, Philippines — Share prices may trek upward this week with the main composite index’s next support level seen at 5,750, with resistance at 6,000 and secondary resistance at 6,170, according to 2TradeAsia.

“The next assessment will be whether they carry enough force to push the index nearer to 7,000 before the yearend,” it said, adding that looming fundamentals include the Bangko Sentral ng Pilipinas (BSP)’s policy meeting on Oct. 1 and third quarter reports beginning next month.

Michael Ricafort of Rizal Commercial Banking Corp. said that most of the recent economic data may have been improving on a month-on-month basis from their worst level in April to early May or at the height of the lockdowns, but remain relatively sluggish especially versus year ago or pre-pandemic level.

“Recovery remains relatively slow amid social-distancing and other stringent measures and health protocols to prevent COVID-19 from spreading further, thereby leading to some businesses to operate way below their usual capacity. Until new COVID-19 cases ease further and until a COVID-19 vaccine is successfully developed and deployed, that would help the economic recovery prospects and investment valuations gain greater traction,” Ricafort said.

Last week, the PSEi corrected lower, giving up 59.06 points, or one percent, after gaining by 182.87 points or 3.2 percent in the previous week.

“Immediate support is at 5,830 level, which helps keep the three-month underlying upward trend intact. The 5,700 to 5,800 levels have been proven to be a strong support during the period of consolidation over the past one to two months, partly supported by near record low local interest rates mostly at one to two percent amid excess liquidity in the financial system, both of which could still prompt the search for higher returns and support liquidity-driven shifts to some riskier assets such as equities, especially amid the recent profit-taking in the bond/fixed income markets,” Ricafort said.