PSEi may test 6,000 level this week

The Philippine Stock Exchange index (PSEi) may test the 6,000 barrier this week following the easing of the Luzon-wide lockdown, according to analysts.

According to Japhet Louise Tantiangco, senior research analyst at Philstocks Financials, the composite index may hover at 5,700 to 6,100 this week.

“The local market is enjoying the optimism stemming from the easing of restrictions. Major regions in the country, in terms of economic contribution, are now allowed to restart their economies,” Tantiangco said.

He said optimism has even brought the market above the 5,700 resistance level last week.

“Sustaining the optimism, however, would depend on the developments of our situation with respect to the spread of the virus. This week, the number of new coronavirus disease 2019 or COVID-19 cases here in the country will be monitored to see if the downgrading of restrictions has brought an unwanted consequence such as the further spread of the virus,” Tantiangco said.

If this happens, he said the market could plunge again below the 5,700 level.

“The rising US-China tensions amid the latter’s approval of the national security bill for Hong Kong is also expected to create a downward pressure on the market,” Tantiangco said.

This developed as the Philippine Stock Exchange, operator of the local bourse, said it would reopen its trading floor today.

The floor which serves as the trading hub of more than 60 percent of stockbrokerage firms has been closed since March 19 following the enhanced community quarantine guidelines issued by the Inter-Agency Task Force (IATF) for the Management of Emerging Infectious Diseases.

“While our floorless or offsite trading from March 19 to May 29 has proven to be efficient and seamless, we decided to reopen and resume trading on the floor to convey a strong message to the investing public that things are back to ‘normal’ in the capital markets. Hopefully, the optics of the reopening will contribute to the restoration of the general public’s much needed confidence in the recovery of our economy,” Monzon said.