STOCKS may rebound this week amid proposed peace talks between Russia and the Ukraine and expectations of a further reopening of the economy with the nationwide implementation of Alert Level 1, the least strict restrictions.

The benchmark Philippine Stock Exchange index (PSEi) slid by 114.82 points or 1.61% to close at 7,007.63 on Friday, while the broader all shares dropped by 41.92 points or 1.11% to 3,718.04.

Week on week, the PSEi retreated by 104.56 points from its finish of 7,112.19 on March 11.

“The PSEi eased on [Friday], after correcting higher for three straight days, amid the weaker peso exchange rate versus the US dollar, recently among the weakest for peso in 2.5 years or since August 2019,” Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said in a text message.

On Friday, the local unit closed at P52.335 per dollar, weaker than its finish of P52.14 on Thursday.

Mr. Ricafort said the drop was also due to Russia’s continued invasion of Ukraine that sent oil, energy and other global commodity prices higher, leading to higher inflation, petitions for transport fare hike, possible wage hike, a risk of second-round inflation effects that could lead to tighter monetary policy and higher borrowing or financing costs for some listed companies.

Oil prices settled higher on Friday, but posted a second straight weekly loss, after a volatile trading week with no easy replacement for Russian barrels in a tight market, Reuters reported.

“Investors will be on the sidelines moving forward. The index will move in a huge range between 6,600 and 7,100 for now. There are still uncertainties but there is hope after news came out that President Zelensky pushes for meaningful talks with Russia,” Mercantile Securities Corp. Analyst Jeff C. See said in a Viber message.

Ukrainian leader Volodymyr Zelensky called on Saturday for comprehensive peace talks with Moscow and also urged Switzerland to do more to crack down on Russian oligarchs who he said were helping wage war on his country with their money, Reuters reported.

“The country’s economic team also proposed measures to further reopen the economy, especially the nationwide easing to Alert Level 1 and resumption of in-person schooling, among other intervention measures, such as more subsidies for the agriculture and transport sectors, temporary lowering of tariffs on some food imports, among other non-monetary measures, in an effort to mitigate the adverse economic impact of the Russia-Ukraine conflict on the Philippine economy especially in terms of higher price so imported oil and energy and other major commodities,” RCBC’s Mr. Ricafort said.

Mr. Ricafort placed the PSEi’s immediate major support between 6,600 and 6,700 and resistance at 7,100 and 7,200.

Meanwhile, Mercantile Securities’ Mr. See put the PSEi’s support level from 6,638 to 7,000 and resistance at 7,200 to 7,545. — Luisa Maria Jacinta C. Jocson with Reuters

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