Gov’t stimulus package boosts market confidence

Investors will be on the lookout for updates on latest stimulus bill, likely a catalyst for market movements this week, BDO Unibank Inc. chief strategist Jonathan Ravelas said.

Ravelas noted that the benchmark index’s close last Thursday at 6,005.40 signaled strong support at the 5,700 level.

This comes as the Senate ratified the P140-billion national recovery bill that would provide targeted assistance to the most affected workers and sectors and improve the country’s response to the COVID-19 pandemic.

Ravelas said the PSEi could stay above 6,000 and potentially bounce higher.

“A sustained rise could see a move toward the 6,300 levels in the near-term,” Ravelas said.

Should the level fail to hold, investors will be looking at 5,700 as the next support level, he noted.

The outlook comes as the PSEi dropped 1.18 percent last week.

Government stimulus efforts are important as an indicator of economic recovery and key revenue measures to support this spending.

Beyond the stock market, Ravelas said interest rates would continue to move sideways in the coming week while the peso has strong support near 48.50 against the US dollar.

“Should the said level hold in the near-term, expect a move back toward P49/49.250 levels. The greenback is quite oversold and is ripe for a rebound,” Ravelas said. INQ