By Revin Mikhael D. Ochave, Reporter
STOCKS are expected to climb this trading week with market sentiment getting a boost from the upcoming change of leadership in the United States (US).
The 30-member Philippine Stock Exchange index (PSEi) ended at 7,289.88 on Friday, higher by 170.27 points or 2.39% from the previous trading session.
On a weekly basis, the main index improved 150.17 points or 2.1%, bouncing back from the prior week’s decline.
Average value turnover rose 10.3% week on week to P10.61 billion, while average net foreign selling widened to P290 million.
Timson Securities, Inc. Head of Online Trading Darren Blaine T. Pangan said in a mobile phone message that the local market may improve this week as US President Donald Trump announced he will not serve a second term in office.
Reuters reported that Mr. Trump acknowledged a new administration would be sworn in on Jan. 20 and promised a smooth transition. This was after Trump supporters stormed the US Capitol last week.
However, Mr. Pangan said the market may also see a downside risk as countries across the world return to stricter quarantine measures due to a fresh surge in coronavirus cases.
Reuters said Cyprus and Israel declared tighter measures on Friday in an effort to mitigate the increase in new COVID-19 cases. It added that Cuba on Saturday announced new containment measures after reporting a surge in COVID-19 infections over the holidays.
Online brokerage 2TradeAsia.com meanwhile said in a market note that the PSEi will be affected by developments on the new coronavirus strain and its effect on the Philippine economy.
“International flights are again being heavily regulated, impacting the aviation and tourism industries. Lockdowns are again at the forefront, especially as Metro Manila remains to be in modified general community quarantine limbo,” 2TradeAsia.com said.
“The saving grace is that vaccines in development also address the new strain. It all boils down to vaccine deployment,” it added.
Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile phone message that the market’s resistance to beat for the week is at 7,300, with the PSEi seen to test 7,500.
2TradeAsia.com meanwhile put the market’s immediate support at 7,100, secondary support at 6,950, and resistance at 7,500 to 7,700.
“As we move to the second trading week of the year, the market may try to retest and break out of its nearest resistance at 7,300. Otherwise, it may go back to its nearest support level at the 7,000-7,050 area,” Mr. Pangan said.