Local bourse tries to sustain gains

THE local market would try to sustain its gains this trading week after it previously breached the 6,400-territory.

Benchmark Philippine Stock Exchange Index (PSEi) shed 0.80 percent, or 52.36 points, to finish at its intraday high of 6,465.13 on the back of the new, all-time high unemployment rate data released on Friday.

Regina Capital Development Corp. Managing Director Luis Limlingan said the market would try to establish a new trading range between 6,200 and 6,600 this week.

He added that investors would see whether the net foreign buying the local bourse experienced in the past trading days would continue to prevail.

On Friday, the local index saw a net foreign buying of P476.37 million.

“Naturally, everyone will be paying attention to how the pandemic is being contained per country and whether daily cases are stabilizing,” Limlingan said.

Meanwhile, Philstocks Financials Inc. research associate Piper Chaucer Tan said the PSEi would be testing the 6,000-support line and would most likely experience profit taking.

He said investors might take cues from the coming Organization of the Petroleum Exporting Countries (OPEC) meeting—which could impact both oil and financial markets, including the Philippines— and the rising geopolitical tensions between the United States and China.

Similar to Limlingan, Tan said the market’s past rally could further should foreign funds continue to enter emerging markets like the Philippines. If this were to happen, he placed the next resistance at 6,750.

“Markets coming from both local and foreign should work hand-in-hand if we want to see further and sustained market rally and pouring money to risk-on assets, such as stocks, might give us also an indication [on] the confidence of investors, but this [could] be cut short [by] the abovementioned negative catalyst,” Tan added.

2Tradeasia, on the other hand, said the local equities’ 10.7-percent advance last week is a “good sign on fund managers’ optimism for recovery.”

“While Covid-19 (coronavirus disease 2019) bruised global economies, healing is bound to make its mark too. Seize on dips to gradually position and opt for modest gains on rallies,” 2Trade continued.

Further, they see the market’s immediate support this week at 6,400, while resistance is between 6,600 and 6,800.