At risk of slipping below 7,000, stock market tries to tame virus fears

The benchmark Philippine Stock Exchange Index (PSEi) will continue its range-bound movement in the coming week although eyes remained fixed on the critical support area near 7,000 as risk aversion creeps higher.

BDO Unibank Inc. chief strategist Jonathan Ravelas still expects consolidation in the 7,000 to 7,300 levels in the “near-term.”

The PSEi fell 1.57 percent to 7,011.11 last week after the government raised the alert level in Metro Manila and other provinces due to post-holiday COVID-19 infections.

The country logged 26,458 new cases on Saturday, surpassing the peak in daily cases during the Delta wave last year.

Stocks in the United States were also down after the US Federal Reserve signaled the raising of market-supportive low interest rates sooner than expected to combat rising inflation.

In the Philippines, the government reported that inflation last December eased to 3.6 percent, its slowest pace in 2021 and below most projections by analysts.

Still, full-year inflation reached 4.5 percent, the highest in three years and above the Bangko Sentral ng Pilipinas’ 2-4 percent target.

Rising COVID-19 numbers and potential new movement restrictions will continue to weigh on investors’ sentiments.

Ravelas said a breakdown below 6,950 would see traders targeting 6,800 to 6,500 next.

“Nonetheless, we expect PSEi to continue on an upward trend in 2022, with the expected fast [gross domestic product] growth in 2022 (boosted by May Presidential elections), aided by robust consumer spending,” First Metro Investment Corp. and University of Asia and the Pacific said in a separate report, meanwhile. INQ