Big news-thirsty market in for a healthy dip this week

The stock market is seen to consolidate recent gains while investors await fresh incentives to buy equities beyond the string of favorable news on the COVID-19 vaccine front.

Last week, the main-share Philippine Stock Exchange index (PSEi) gained a total of 343.1 points or 5 percent to close on Friday at 7,134.56.

It will be a four-day trading week as there will be no trading tomorrow, Dec. 8, a nonworking holiday in observance of the feast of the Immaculate Conception of Mary.

Rachelle Cruz, head analyst at AP Securities, said the week could start with muted trading due to the holiday.

“Also, the negative surprise on November inflation at 3.3 percent versus median estimate at 2.6 percent and 2.5 percent in October may also weigh on the market,” Cruz said.

“Expect the PSEI to consolidate between the 6,900 and 7,200 range in the near-term as market participants seek new catalysts that will push the index higher,” she said.

Manny Cruz, chief strategist at Papa Securities, said the market could just pocket recent gains and might even make a pull back. But he noted that any weakness would be an opportunity to position for 2021.

“The quick turnaround of the market after hitting the 6,700 level early last week is a testament that better days are ahead and that dips are great opportunities to accumulate ahead of of the rollout of the [COVID-19] vaccine in 2021 that will allow the economy to get back on track,” Cruz said.

Cruz expects a strong support level for the PSEi at 6,700. INQ