Stock market traders wary over rising COVID-19 cases

Share prices are expected to continue their sideways movement this week amid surging COVID-19 cases in the Philippines.

Analysts said the rising COVID-19 cases will be one the main concerns of investors as it can trigger stricter quarantine measures once again.

The government on Saturday registered a record high of 19, 441 COVID-19 cases and the highest positivity rate of 27.5 percent.

The government announced Metro Manila will remain under modified enhanced community quarantine until September 7 but investors are worried over the authorities’ next move if cases continue to increase.

“While there is low likelihood of reverting to stricter ECQ status, that are all encompassing, targeted lockdowns at the barangay level may continue to hurt sentiment for recovery (and lead to) wider downside risk in the medium term,” online brokerage firm 2TradeAsia.com said.

“The wildcard will be improvement in vaccine rollout which are improving outside of Metro Manila, which have to move in almost parabolic to counter arguments of a return to ECQ by the fourth quarter of 2021,” it added.

The bellwether Philippine Stock Exchange Index rose 2.3 percent to 6,786.62, while the broader All Shares Index climbed 2 percent to 4,204.11.

Four of the six sectoral indices posted week-on-week gains, with service gaining 7.4 percent, holdings firms by 2.29 percent, industrial by 2.06 percent and financial by 0.56 percent.

The property index declined by 0.8 percent while the mining and oil index slipped 0.3 percent.

Foreign investors were net buyers for the week by P2.03 billion, while average daily value traded was slightly higher at P6.8 billion.

Weekly top price gainers were Globe Telecom Inc., surging 32 percent to P2,848, while PLDT Inc. jumped 17.4 percent to P1,467.

Weekly top losers were EEI Corp., which dropped 5.6 percent to P8.12, Alliance Global Group Inc., which dipped 3.6 percent to P10.22, and Ayala Land Inc., which fell 3.5 percent to P33.50.

Global stock markets, meanwhile, jumped Friday after Federal Reserve Chair Jerome Powell took a cautious stance on a potential withdrawal of the central bank’s huge economic stimulus measures later this year.

Major Wall Street indices closed at records after Powell delivered his annual speech at the virtual Jackson Hole central banking symposium, while European trading ended positively after a quiet session.

Powell’s address was closely watched for signs of the Fed’s plans to reduce the bond-buying that has helped support the pandemic recovery, and for any indications of when the bank could see interest rates rising.

Despite the impact of the fast-spreading Delta variant of COVID-19, Powell said the US economy has continued to recover and shown strong job growth.

But he stressed that there was no hurry to raise interest rates, arguing that current inflation pressures will be temporary, and repeated the Fed’s stance that “it could be appropriate to start reducing the pace of asset purchases this year.”

His remarks came after some other Fed members had argued that the bank could taper its asset-buying scheme this year.

“We finally heard from the Fed chairman and the markets loved it, even though he said what many had expected, that tapering bond purchases could begin before the end of the year,” said Fawad Razaqzada, market analyst at ThinkMarkets. With AFP