Index may hover at 6,500 this week

MANILA, Philippines — The Philippine Stock Exchange Composite Index (PSEi), the stock market gauge, is seen hitting its next resistance level between 6,400 and 6,500.

This, said Michael Ricafort, chief economist at Rizal Commercial Banking Corp., serves as the next gateway for further upside potential.

He said a consolidation or base-building mode is in progress.

Immediate support is at the 6,130 to 6,200 range, considered as the previous breakout points, which help keep intact the latest strong upward trend over the past two weeks.

Last week, the PSEi gained after healthy profit-taking for three straight days, rising by 74.61 points or 1.2 percent to close at 6,324.00.

The PSEi succumbed to what is considered as healthy profit-taking, by 160.06 points or 2.5 percent, or a little over a quarter the previous week’s gains in terms of points. This was after sharply rising in the previous week by 585.59 points or 9.9 percent, the biggest gain among major global stock markets.

Ricafort noted the index’s performance is still among one-week lows, but nevertheless near four-month highs.

He cited several factors that affected last week’s performance such as strong external factors, including healthy upward correction in the US stock markets after stronger US GDP data and jobless claims data; easing of global oil prices to among the lowest levels in 4.5 months, which in turn, help sustain benign inflation.

Market investors are also looking at the number of new COVID-19 cases, which continued to linger at 1,000 to 2,000 levels for more than a week already. This is still lower compared to the usual 2,000 to 3,000 daily case count, Ricafort said.

Continued measures to further re-open the economy, including easing of some restrictions on public transportation are also giving investors some level of comfort.