Stock market to continue consolidating

Share prices are expected continue to consolidate this week with an upward bias as positive investor sentiments over the economy outweighs concerns about the Omicron variant of coronavirus.

BDO Unibank Inc. said the stock market may consolidate between 7,000 points and 7,300 points this week after the government projected a faster economic growth this year.

The Development Budget Coordination Committee (DBCC) last week raised raised its economic growth target for 2021 to 5.5 percent from a previous forecast of 4 to 5 percent. It also kept its estimate of a 7-percent to 9-percent growth for 2022.

The government attributed the faster growth target to the reopening of the economy in the third quarter of the year after COVID-19 cases declined significantly due to the vaccination drive of the government.

The Philippine Stock Exchange Index last week jumped 1.5 percent to close at 7,297.66, while the broader All Shares index climbed 0.6 percent to 3,851.59 as the government maintained its policy rates.

Sectoral indices ended mixed. Holding firms rose 2.3 percent while financials advanced 2 percent.

The mining and oil index slipped 0.9 percent, while property and industrial both dropped 0.1 percent.

Foreign investors were net buyers for the week by P80 billion. The buying was boosted by the completion of the sale of Aboitiz Equity Ventures Inc.’s 25-percent stake in unit Aboitiz Power Corp. to Japan’s power producer JERA Co. Inc.

The average daily value turnover rose to P25.5 billion from the previous week’s P19.8 billion.

Weekly top price gainers were PLDT Inc., which jumped 9.8 percent to P1,900; SM Investments Corp., which rose 6.3 percent to P999; and Bank of the Philippine Islands, which climbed 3.7 percent to P94.

Weekly top price losers were DITO CME Holdings Corp., which declined 11.5 percent to P5.51; Wilcon Depot Inc., which dropped by 5.9 percent to P31.05; and Puregold Price Club Inc., which fell 5.2 percent to P36.55.

Meanwhile, world stock markets mostly fell Friday, giving up gains made after major central banks took action to combat soaring inflation as the fragile economic recovery appears threatened again by spiking COVID-19 cases.

In Europe, London equities bucked the trend by managing a small gain, one day after the Bank of England delivered a shock interest rate hike to counter decade-high UK inflation.

All major Wall Street indices fell, with the Dow and S&P 500 seeing the biggest losses.

Oil prices dropped on renewed demand fears linked to the Omicron COVID variant.

“It’s been a volatile week, not only in term of price actions but the news that have been coming out,” said Tom Cahill of Ventura Wealth Management, adding that “the markets are still trying to work through the scenario.”

European indices rallied Thursday after the US Federal Reserve and European Central Bank laid out inflation-fighting plans and the BoE hiked interest rates to 0.25 percent.

Asian indices had also jumped after the Fed announced a more hawkish path, speeding up the rollback of its pandemic stimulus, and signaling policymakers expect a number of interest rate hikes in 2022 and beyond as the economy rebounds.