Index to trade sideways this week

MANILA, Philippines — The Philippine Stock Exchange Composite index (PSEi) is seen to trade sideways this week with immediate support seen at 6,300 to 6,400 and resistance at 6,500 to 6,600, according to 2TradeAsia.

After the recent sell-off, investors picked up bargains, but the market’s overall tone remained subdued amid rising daily new COVID-19 cases, particularly in Metro Manila.

The PSEi jumped 108 points or 1.6 percent to 6,544 last week.

“All sectoral indices finished in the green, primed by property (up 2.91 percent), services (up 2.45 percent) and mining and oil (1.44 percent). Average value turnover improved to P9 billion, up 9.22 percent week on week while net foreign selling eased to P510 million, down 25.14 percent,” 2TradeAsia said.

It noted that the rise in COVID-19 cases has spooked the market.

“As mentioned in our past note, beyond 8,000 new cases per day will signal an aberration in the recovery for COVID-19 cases and may necessitate some hard counters from the government in order to rein back further damage to public confidence.

Whether a ‘bubble’ strategy is a hard enough counter is up for argument, but in our view, in order to reassure already agitated market participants: first, clear and singular communication from authorities must be heard; this means confirming whether a stimulus package, as Congress is pushing, can truly be expected by the market, lessening the room for speculation.

Second, vaccine rollout must produce material progress; as of end-March, more than 500,000 have been vaccinated.

This is a measly 0.5 percent – note that herd immunity for COVID-19 is projected to be achieved at 70 to 90 percent,” 2TradeAsia.com