PHILSTOCKS Financial, Inc. revised its year-end target for the benchmark Philippine Stock Exchange index (PSEi), which the brokerage now expects to range within 7,150 to 7,680 by yearend.

The updated year-end target is lower than the 7,150 to 7,750 target it set in February as the country continues to grapple with the effects of the coronavirus disease 2019 (COVID-19) pandemic, particularly with the impact of the more transmissible Delta variant.

“The reversion of Metro Manila and other key cities to the strictest lockdown measures has adversely hit consumers, businesses, and the economy in general,” Philstocks Financial’s report said.

Metro Manila was placed under enhanced community quarantine restrictions in August in an attempt to curb the spread of the Delta variant of COVID-19. The National Capital Region (NCR) is under Alert Level 4 until end-September under the government’s piloted granular lockdowns.

“We are optimistic about the recovery of the economy, which in turn could drive the market further upward this year,” Philstocks Financial said.

“This is hinged on the expectations that our vaccination campaign will continue and establishments will be further reopened in the country for the rest of the year,” it added.

According to the Health department’s national COVID-19 vaccination dashboard, the country has administered over 43.93 million COVID-19 jabs as of Sept. 26, of which nearly 20.31 million are fully vaccinated.

The brokerage said the market “may settle” at 7,150 if the government does not reach its vaccination target and if restrictions are not eased to accommodate more economic activities.

The PSEi closed at 6,956.26 on Monday, gaining 4.73 points or 0.06%.

“In order for the main index to breach and sustain its ground above the 7,000 to 7,100 levels, the other sectors, particularly the laggards like banks and properties, should show signs of recovery as well,” Philstocks Financial said.

The index’ race to breaching its psychological resistance of 7,000 also relies on reaching vaccination targets and eased restrictions.

Philstocks Financial also adjusted its projection for the economy, lowering its growth forecast to 4% to 4.4%, from its initial 5.8% to 6.3% estimate, due to the reimposed restrictions in the third quarter.

“Assuming restrictions would be eased in [the fourth quarter], our economy would be able to take advantage of the power of household consumption during the Christmas season,” the brokerage said, adding that a “sustained improvement” in the country’s COVID-19 situation may also boost “confidence towards the economy.” — Keren Concepcion G. Valmonte