Positive economic data to lift stocks this week

PHILIPPINE SHARES may continue moving sideways this week with an upward bias as positive economic data across the world are expected to continue.

The benchmark Philippine Stock Exchange index (PSEi) picked up 8.58 points or 0.13% to close at 6,372.66 on Friday. On a weekly basis, the PSEi went up 3% to reverse the 1.95% decline in the prior week.

Value turnover rose 27% to an average of P8.48 billion. Foreign investors became net buyers with net inflows reaching an average of

P1.08 billion, reversing the previous week’s average net foreign selling of P1.15 billion.

AAA Southeast Equities, Inc. Research Head Christopher John Mangun said the positive performance in the local bourse was in line with other markets which were boosted by better-thanexpected economic data.

Among these were the improvements in manufacturing data in many economies including the Philippines and the growth in nonfarm payrolls in the United States.

“The PSEi started the week lower as it moved toward its support at 5,950, but then, it quickly changed course and started moving higher as bargain hunters took advantage of low prices,” Mr. Mangun said in a market note.

In the coming week, Mr. Mangun said the market may keep its upward trajectory as June marked the third consecutive month of the PSEi’s gains.

“After last week’s performance, we may see the main index continue higher and test its next resistance at 6,600. A successful breakout above this resistance level by the end of the week will signal an even stronger move higher in the coming weeks,” he said.

For Philstocks Financial, Inc. Research Associate Claire T. Alviar, the market is likely to move sideways with investors still weighing economic recovery hopes against mounting cases of coronavirus infections in the Philippines.

“The difference between past weeks and (this) week is the optimism for the week ahead could be higher given the strong data coming offshore… This can boost investors’ sentiment as it can be viewed as the start of economic recovery,” she said in a text message.

“Here at home, recovery hopes have also started as the government eased lockdown measures, and more businesses are reopened already with additional available transportation modes,” Ms. Alviar added.

She also said investors may price in comments from Socioeconomic Planning Acting Secretary Karl Kendrick T. Chua that the gradual recovery of the local economy may start this month.

Investors will also await the June inflation report of the Philippine Statistics Authority to be released on Tuesday.

“Anticipated benign June inflation rate to be released… could add positive sentiment as this may, at least, strengthen purchasing power — helpful in the consumer stocks, as well as in the overall economy,” Ms. Alviar said.

AAA Southeast Equities’ Mr. Mangun is putting support for the market within 6,040-6,350 and resistance within 6,600-6,800. —