PSEi prepares for another tricky climb to 7,000

The local stock barometer appears to be resuming efforts to capture the elusive 7,000 territory as investors await further clues from the highly anticipated US Federal Reserve meetings later this week. The Philippine Stock Exchange Index (PSEi) fell 0.83 percent last week, closing at 6,912.85 Friday as investors posted gains as the index neared the 7,000 mark.

The PSEi had pulled back following the rebalancing of the Financial Times Stock Exchange index after hitting a high of 7,033 early in the week, said Ron Acoba, chief investment strategist at equity research provider Trading Edge Consultancy.

As trade normalizes [this week] after the said rebalancing, we expect the index to hit its 7,000 resistance again. It may take a few tries, but we believe it will soon be positioned for an upward swing, Acoba said.

A successful break from the high of 7,064 seen last July could push the PSEi back to this year’s peak of 7,300 to 7,400, Acoba said.

BDO Unibank chief strategist Jonathan Ravelas said the market is currently hitting a wall of worry amid a confluence of factors: prolonged COVID-19 pandemic, inflation and the unwinding of monetary stimulus by the US Fed.

He noted that investors had taken advantage of a rebound last week to ease their positions ahead of US Fed meetings. The Federal Open Market Committee will announce the results of its meetings on September 23 (Manila time). The weeks closing at 6,912.85 indicate the markets’ failure to sustain the rally above the 7,000 levels, Ravelas said.

He sees a retest of the lower end of the 6,700 to 7,000 consolidation range.

Since the beginning of the year, the PSEi has lost 226.86 points or 3.2 percent.

Meanwhile, Ravelas noted the weekly close of the pesos at 49.95: $1 indicated continued consolidation within the short-term levels of 49.70 to 50.10. INQ

Read next

Don’t miss the latest news and information.

For feedback, complaints or questions, Contact us.