PSEi seen to remain below 7,000 | Inquirer Business
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PSEi seen to remain below 7,000

/ 04:07 AM June 14, 2021

As the market hit overbought levels, the stock barometer is seen to consolidate below the 7,000 barrier this week.

Last week, the Philippine Stock Exchange index (PSEi) advanced by a total of 111.45 points or 1.6 percent to close at 6,907.79.Jonathan Ravelas, chief strategist at BDO Unibank, said last week’s gains had been driven by growing optimism that the reversal of funds flow favoring emerging markets might not be short-lived.

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He also noted that the latest Philippine trade data showed encouraging signs that recovery was underway.

“The week’s close at 6,907.79 signals the market is quite overbought and could trigger some profit-taking,” Ravelas said.

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“Continue to expect the market to range between the 6,700 to 6,950 levels in the near-term,” he said.

Papa Securities said 7,000 would likely hold as a resistance point for the index.

The PSEi remains in an overbought relative strength index position following its 12-percent gain in the past two weeks, the brokerage said.

“So while we believe that the medium-term movement would still be to the upside, we would highly prefer to enter the index on dips, hopefully to its more major support at the 200-day moving average of 6,600,” Papa Securities said.

Moving forward, among the potential catalysts for the market could be the further easing of lockdown restrictions in Greater Metro Manila, the brokerage house added.

In a research note, BPI said one key headwind for the market would be local consumer price pressures which remained high to date.

The bank said “the likely persistence of elevated inflation prints for the balance of 2021 dims hopes for substantial rallies in the local equity and bond markets.”

It said the labor situation in the country might improve in the coming months given the easing of restrictions, particularly in the National Capital Region.

—Doris Dumlao-Abadilla INQ
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