PSEi to track global pandemic situation

Investors would continue monitoring developments in the global pandemic situation, especially amid the emergence of the Omicron variant, along with the anticipation of the release of some major economic data this trading week.

Philstocks Financial Inc. senior research analyst Japhet Tantiangco said developments in the new variant of concern, the Omicron, would be tracked by investors.

"If the said strain is detected in more parts of the world, worse, if it enters the Philippines, then it may escalate Covid-19 and economic worries, which could pull the local market down further," he explained.

Tantiangco added that the release of some local economic data would also be watched. This includes the latest labor data, inflation rate, foreign trade and foreign direct investments figures.

"If we see better employment figures, then it may give an upward boost to sentiment since it confirms the continuing recovery momentum of our local economy," Tantiangco said.

Last week, the local stock barometer Philippine Stock Exchange index (PSEi) closed in the 7,000 territory after climbing 0.32-percent or 22.65 points to conclude at 7,055.19 on Friday.

The market's decline last week brought it back to its 7,000 to 7,100 support range, which Tantiangco said could be tested this week.

Rizal Commercial Banking Corp. chief economist Michael Ricafort likewise cited the release of inflation rate, unemployment and trade data among major catalysts for the local bourse.

Ricafort also included the target approval of the 2022 national budget.

The Senate last Wednesday approved on the third and final reading the country's 2022 national budget, which amounts to P5.024 trillion.

The trend in local Covid-19 cases, the country's quarantine restrictions and the progress in the Covid-19 inoculation program would also be monitored, according to Ricafort.

The Philippines logged 517 new Covid-19 cases on Saturday, bringing the total to 2.834 million.

Chartwise, Tantiangco sees the market testing its present 50-day exponential moving average of 7,160.01, if it manages to retain its position in the 7,000 to 7,100 range.

Failing to do so, however, could mean the main index testing its current 200-day exponential moving average of 6,884.47 next, Tantiangco continued.

Source: TheManila Times