The local bourse is expected to take cues from the performance of the US markets and track the results of upcoming local economic data for this week’s trading, an analyst said.
Last week, the Philippine Stock Exchange index (PSEi) saw a last minute rebound as it climbed 1.19 percent or 74.61 points to finish at 6,324 on Friday amid the Wall Street’s rally.
Philstocks Financial Inc. research associate Claire Alviar said the main index will weigh local and foreign catalysts for the trading week, and is seen to establish a support line and bounce from that level.
She said tlocal shares would follow the performances of the US markets amid the forthcoming US elections and the negative sentiment from the resurgence of coronavirus disease 2019 cases abroad.
Locally, Alviar expects the release of better economic data — including the Markit Manufacturing Purchasing Managers’ Index for October and the month’s inflation rate — to stimulate positive sentiment in the market as this is seen to signal economic recovery.
Investors, meanwhile, have mixed sentiments on the government’s recent extension of the general community quarantine (GCQ) in the National Capital Region.
“[W]e think that the decision of the government to keep Metro Manila under GCQ is mixed given the lingering restrictions, but this seems to be more biased to the positive since the economy is reopening already,” Alviar explained.
President Rodrigo Duterte announced Metro Manila would remain under GCQ until November 31 along with the provinces of Batangas and Lanao del Sur and the cities of Iloilo, Bacolod, Tacloban and Iligan.
Alviar said the PSEi is expected to establish a support zone around the 6,000 to 6,100 level, then possibly bounce within the territory as investor participation improves.
She noted that value turnover in the previous week averaged about P7 billion daily, excluding the listing day of Converge ICT Solutions Inc. last Monday.
The figure is higher than September’s P5.2-billion average value turnover, according to Alviar.
“[W]e’ve [also] seen foreigners lately coming back in the market which is a good sign that could help sustain the rally,” Alviar added.
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