Market may trade at 6,600-6,700 level

The stock market is expected to remain in the doldrums this week as the COVID-19 cases in the country continue to rise at an alarming rate.

The Philippine Stock Exchange Composite index (PSEI)’s immediate resistance may range from 6,600 to 6,700 level, while the immediate major support is seen at 6,400.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the 6,400 level has kept the market’s underlying upward trend over the past five months.

Since the start of 2021, the PSEi already declined by nearly 10 percent versus the end-2020 level of 7,139.71.

In March alone, the PSEi already declined by 5.3 percent since the start of the month after gaining by 2.8 percent in February.

The index nosedived by 194.75 points or 2.9 percent to close at 6,436.10 on March 19, the lowest in nearly five months or since Nov. 4, 2020.

Ricafort said this was largely due to several factors, including the recent spike in new COVID-19 cases to a new record high on a daily basis.

“The government already took back some of the recent measures to further re-open the economy a few weeks ago in response to the recent increase in new COVID-19 cases, hitting new record high on a daily basis. The new lockdown could slow the pace of economic recovery,” Ricafort said.

However, he noted investors could find hope in the vaccine rollouts in the country, already in the third week, as well as the arrival of more vaccine doses in the coming weeks and months.

The possible signing of the CREATE or Corporate Recovery and Tax Incentives for Enterprises Act into law any time soon could also be a catalyst for investors, Ricafort said.