Market to stay bearish this week

Bearish sentiment continues to prevail in the stock market and will likely stay this week.

Support remains at 6,100, while a resistance is building up at 6,350.

“This week, we may see the local market test the 6,100 level,” said Japhet Louise Tantiangco, senior research analyst at Philstocks Financials.

“Bearish sentiment is seen to be building up as the local market posted two straight weeks of decline, shedding 4.39 percent in the process,” he said.

The trend may continue this week as coronavirus disease 2019 or COVID-19 risks weigh on economic recovery hopes.

“The strength and the speed of our recovery remains uncertain amid the unabated rise in coronavirus cases. With Saturday’s 560 new fresh cases, average addition of fresh cases for the week is at 542, still higher than the prior week’s average of 403,” Tantiangco said.

He also said that this points to a possible extension of social restrictions which would keep the economy from operating at full capacity.

“A reversion to stricter forms may even be possible, which if done would aggravate the economic losses,” he said.

Even foreign fund managers are feeling the pinch and have become more risk averse, according to Tantiangco.

“Foreign funds exodus may also continue as the global economy continues to deal with the pandemic’s impact,” he said.

Last week week, net foreign selling averaged P1.15 billion, higher than the prior week’s average by 13.06 percent.