Further reopening of businesses to trigger market optimism

The benchmark Philippine Stock Exchange Index (PSEi) could move higher in the near-term on optimism that businesses will continue to reopen and provide a needed boost to the economy.

BDO Unibank Inc. chief strategist Jonathan Ravelas said the PSEi rallied, posting a 2.75-percent gain to end the week at 5,999.40.

This came after the September Manufacturing PMI rose to 50.1 from 47.3 in August.

“It’s highest reading since February 2020,” Ravelas said in a note to investors.

“Optimism of further reopening of the economy next month also helped improve local investor’s appetite to buy stocks causing the index to try the 6,000 levels,” he added.

He said gains last week showed the PSEi had momentum to test the 6,000-6,300 levels. However, failure to hold those gains could see the PSEi falling back to the 5,700 support zone.

Luis Gerardo Limlingan, managing director at Regina Capital Development, said news that United States President Donald Trump and other White House officials tested positive for COVID-19 could inject further uncertainty in the global markets.

“Markets will be glued to the health of the POTUS,” Limlingan said, adding this could fuel market volatility in the near-term. INQ