PSE may resume upward trek

MANILA, Philippines — The stock market is expected to trek upward this week with resistance seen at 6,150 to 6,250 level, which may be the gateway for further upside potential, according to Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort.

The Philippine Stoxck Exchange Composite Index (PSEi) corrected lower on Aug. 14 after rising for four straight days.

Ricafort said this is considered a healthy profit-taking.

The PSEi ended lower by 20.87 points to close at 6,076.91 last week, still among three-week highs since July 22, or up from  a two and in half-month low since June 3 amid better economic recovery prospects after Malacañang recently signaled possible easing of the stricter quarantine measures in Metro Manila and nearby areas after Aug. 18.

“The underlying upward trend or momentum over the past two weeks remains intact for as long as the PSEi sustains above the immediate support levels at 5,850 to 5,990,” Ricafort said.

In all, Ricafort said the continued optimism on a COVID-19 vaccine also boosted market sentiment, including the PSEi, as this supports better economic recovery prospects.

Possible further monetary easing measures and other economic reform measures such as the CREATE bill, Bayanihan 2 bill, FIST bill, increased infrastructure spending, and other support measures that may be needed most by the economy at this time, could also support market sentiment and investments valuations, Ricafort said.

According to Ricafort, major market leads and catalysts that may affect the stock market include the government decision to ease the stricter quarantine measures in Metro Manila and nearby areas after Aug. 18, trend in new COVID-19 cases, the gross international reserves data, overseas Filipino workers remittances data, the balance of payments report and the upcoming Bangko Sentral ng Pilipinas monetary policy-setting meeting.