Share prices may gain ground this week with immediate support seen ranging from 5,850 to 5,990 level, which help keep the underlying upward trend since early August.
The composite index’s next resistance may range from 6,150 to 6,250 level, which serves as gateway versus further upside potential of the market, said Michael Ricafort, chief economist at Yuchengco-owned Rizal Commercial Banking Corp.
He said this could be a potential retest of the post-pandemic high of 6,583.84 posted on June 9.
Last Thursday, the PSEi declined for the second straight day, down for the fourth day in five days by 36.72 points to close at 6,005.40 after hefty gains over the past two weeks in anticipation of the easing of quarantine measures in Metro Manila and nearby areas, as well as the market optimism after the announcement of the first COVID-19 vaccine by Russian President Vladimir Putin on Aug. 11.
“On external factors, US stock markets mostly corrected slightly lower from record highs after the Federal Reserve’s latest signals that the pandemic would weigh heavily on the economy and the US economic recovery would largely depend on the containment of the coronavirus,” Ricafort said.
The ghost month in East Asian markets could have also partly triggered some of the healthy profit-taking at the PSEi recently, he said.
For the whole week, the PSEi corrected lower by 71.51 points or 1.2 percent after gaining in the previous week by 230.89 points or 3.9 percent.
In all, the PSEi declined by 1,809.86 points or 23.2 percent since the start of 2020 versus the end-2019 closing rate of 7,815.26.
This reflects market expectations about the possible decline in the net income results of listed companies largely due to the coronavirus lockdowns.
Courtesy of Iris Gonzales (The Philippine Star )
Source: Peso Economics
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