Stocks may yield to profit taking

Share prices are expected to move sideways this week with an upward bias, with investor confidence slowly coming back as the government implements measures to mitigate the impact of the COVID-19 pandemic on the domestic economy.

The government last week secured World Bank’s approval for a $500-million to fund a economic stimulus package to contain the virus and help affected sectors.

“Market barometer PSEi rose 3.06% week-on-week for the third straight week to 5,510.83 as investor confidence is slowly returning back after government announced concrete measures that would help soften the impact of the pandemic and the extended lockdown,” BDO Unibank Inc. chief investment strategist Jonathan Ravelas said.

“The week’s close at 5,510.83 highlights the bounce has still some room to try 5,800 levels in the near-term. Some profit-taking activities may have started as we are near the said levels,” he added.

The Philippine Stock Exchange Index last week rose 3.1 percent to 5,510.83, while the broader All Shares Index climbed 2.2 percent to 3,332.44.

Except for the financial index which declined 2.2 percent, all other sub-indices ended in the green led by industrial, which rose 9.9 percent, holding firms which gained 4.7 percent, services which advanced 2.8 percent ,and mining and oil and property which added 1.4 percent and 0.5 percent, respectively.

Foreign investors were net sellers during the week by P2.5 billion, while the average daily value traded stood at P5.7 billion, up from the previous week’s average of P5.35 billion.

Weekly top price gainers were Universal Robina Corp., which jumped 18.4 percent to P122, Jollibee Foods Corp., which climbed 17.6 percent to P120, and Manila Electric Co., which advanced 10.9 percent to P266.20.

Weekly top price losers were Filinvest Development Corp., which declined 9.5 percent to P8.50, SSI Group Inc., which dropped 6.9 percent to P1.21, and Bank of Philippine Islands which fell 5.8 percent to P57.05.

Asian markets, meanwhile, were mostly higher on Friday after the latest US coronavirus stimulus measures boosted Wall Street overnight.

In its latest attempt to ease the economic pain inflicted by the COVID-19 pandemic, the US Federal Reserve said it would pump $2.3 trillion through new lending programs.

The strong close on Wall Street boosted Tokyo’s benchmark Nikkei 225, which finished 0.8 percent higher.

The market remains in a “tug-of-war between those who are pessimistic (about the pandemic) and those who are optimistic… they don’t want to miss a rare chance to buy” shares at low prices, said Mutsumi Kagawa, chief global strategist at Rakuten Securities.

Seoul also rose, gaining 1.3 percent, and Taipei was up 0.4 percent. But Shanghai ended down one percent. 

Hong Kong, Sydney, Wellington, and Singapore were closed for a public holiday.

The Fed appears to be “on a mission to blow holes in every dam that stops the flow of credit,” said Stephen Innes, chief global markets strategist at AxiCorp.

“And it sure sounds like they have plenty more dynamite if needed.” With AFP