PSEi to stay on course toward 7,000

MANILA, Philippines — The stock market will resume its chase for the elusive 7,000 level this week as investors turn their sights on inflation results for August.

Despite finishing in the green last Friday at 6,897.54, the benchmark Philippine Stock Exchange index (PSEi) declined by 0.93 percent week-on-week as profit taking prevailed.

“Last week’s trading shows that the local market is having a difficult time getting past its 7,000 resistance level. On a positive note, the market has been maintaining its position above its 10-day exponential moving average,” Philstocks Financial research manager Japhet Tantiangco said.

Unicapital head of research Wendy Estacio-Cruz said the PSEi might trade sideways this week as investors await the release of August inflation and unemployment rates.

“If both exceed expectations, the PSEi may attempt to break the 7,000 resistance level again,” she said.

Unicapital said the consumer sector, in particular, should see positive effects from increased consumer confidence and lower inflation moving forward.

On his end, Tantiangco said the local market could move with an upward bias on the back of expectations that the country’s August inflation print would be lower than July’s 4.4 percent.

“Confirmation of the said expectations may also somehow give the market a boost in the latter part of the week,” he said.

Tantiangco said investors are likewise expected to take cues in the coming days from other economic data including the peso’s movement against the US dollar and the S&P Global Philippines’ Manufacturing PMI for August.

RCBC chief economist Michael Ricafort said the next resistance for the local bourse remains the 7,000-psychological market, particularly the high of 7,070.72 posted last April 2.

“The underlying upward trend for more than three weeks already remains intact for as long as it remains above the immediate support at 6,635 to 6,705 levels,” Ricafort said.