Market may hover at 6,200 this week

For this week, the Philippine Stock Exchange index’s immediate support is seen at the 6,000 to 6,200 level, said Michael Ricafort, chief economist at Yuchengco-owned Rizal Commercial Banking Corp.

Next resistance is seen at 6,600 to 6,700 level, which will then serve as a gateway prior to further upside potential.

Ricafort said major catalysts in the financial markets include trend in new coronavirus disease 2019 or COVID-19 cases locally and in some countries as economies further reopen from lockdowns.

The PSEi tumbled on Friday after rising for three straight days to close at 6,315.07, among the lowest in two weeks.

However, Ricafort said that this is still among three-month highs as US and other major stock markets around the world corrected lower after hefty gains to among three-month highs that were back to pre-COVID-19 lockdown levels as more economies around the world further reopen their respective economies from lockdown, thereby resulting in some healthy profit-taking.

“This was partly triggered by recent geopolitical risk factors highlighted by the tensions between China and India amid border clashes, North Korea and South Korea, and US President Trump signalling that the US could pursue a complete decoupling from China,” he said.

In all, he said concerns over risks of new COVID-19 cases in China, in some US states, and in some countries that reopened from lockdowns also partly triggered the healthy profit-taking in the global stock markets recently.

“Offsetting positive factors include the Federal Reserve’s plan to purchase corporate bonds as a form of quantitative easing measure that infuses more dollar funds and liquidity into the US economy, the proposed $1 trillion infrastructure spending by the Trump Administration,” Ricafort said. By: Iris Gonzales (The Philippine Star )

Source: Peso Economics