PSEi atop slippery 5,700

Local stocks are seen to trade with continued caution this week especially with US stocks retreating from record highs.

Continuing its decline for the third week in a row last week, the main-share Philippine Stock Exchange index (PSEi) shed 99.09 points or 1.7 percent to close Friday at 5,785.09.

Despite the relaxation of some lockdown measures, confidence in the economy remains pinned down by the steady stream of new COVID-19 cases, said Jonathan Ravelas, chief strategist at BDO Unibank.

“Improvement in investor sentiment hinges on earnings and further reopening of the economy,” he said.

“The week’s close at 5,785.09 highlights the market’s vulnerability to sell-offs.”

Ravelas expects the PSEi to hover between the 5,700 and 6,000 levels in the near-term.

Papa Securities said the sell-off in the US markets came at the worst time for the PSEi especially with the index struggling to keep its footing at the 5,700 support level.

It said PSEi’s failure to stay above 5,700 would see a retest of the 5,400 lows last seen in May.

Union Bank, in a research note written by Jun Trinidad and Carlo Asuncion, expects the PSEi to trade between a low of 5,600 and a high of 5,800 in the coming week.President Duterte’s expected approval of Bayanihan to Recover as One Act (Bayanihan 2) would likely sustain sequential macroeconomic gains later in the year, easing uncertainties and other pandemic headwinds, the research said. INQ