SHARES OUTLOOK FOR THE WEEK Pandemic, inflation to bug index

THE local bourse is seen declining this trading week as the number of local coronavirus disease 2019 (Covid-19) cases shooting up anew and amid elevated inflation expectations, an analyst said.

Last week, the benchmark Philippine Stock Exchange index (PSEi) inched down by 0.02 percent or 1.12 points to close at 6,881.37, following the release of the country’s February inflation rate on Friday.

Philstocks Financial Inc. senior research analyst Japhet Tantiangco said the resurgence of Covid-19 cases in the country, including the increase in number cases of those with more infective strains from the United Kingdom and South Africa, might weigh on the sentiment due to its foreseen impact to the local economy.

“This includes dented consumer and business confidence, as well as the risk of reimplementation of strict social restriction measures,” Tantiangco noted.

The Philippines recorded 3,439 new Covid-19 cases on Saturday, a record for the current year.

Tantiangco added that inflation worries might also slump the main index.

“Inflation worries amid supply side problems in some of our agricultural commodities, primarily pork, and increasing oil prices may also add downward pressure to the market,” he explained.

The developments in the US bond yields will also be monitored as its further rally could lead to the exodus of foreign funds, which would intensify selling pressures, according to Tantiangco.

Meanwhile, he said positive developments in the country’s procurement and rollout of the

Covid-19 vaccines might help tilt its bias to the upside.

Investors are also expected to take cues from the upcoming corporate earnings reports and employment figures this week, Tantiangco said.

The local market’s support is seen at 6,600, while resistance is at 6,900.