Strict lockdown rules stalling market’s rise to 7,000 points

Share prices are expected to trade sideways this week, weighed down by strict quarantine restrictions that could to delay recovery of the domestic economy.

Philstocks Financial Inc. said the Philippine Stock Exchange Index was struggling to break the 7,000-point level due to weak market participation from both domestic and foreign investors.

“The medium-term trend of the market is still sideways with an upwards bias as it forms higher lows. We are seeing a correction after the short-term uptrend of the main index,” the brokerage company said.

Philstocks lowered its PSEi yearend target to the 7,150 to 7,680 level from 7,150 to 7,750 in February due to the impact of the COVID-19 Delta variant.

“The reversion of Metro Manila and other key cities to the strictest lockdown measures has adversely hit consumers, businesses, and the economy in general. This negatively affected our market outlook for 2021,” Philstocks said.

Philstocks said other sectors, especially laggards like banks and properties, should show signs of recovery in order for the PSEi to breach and sustain its ground above the 7,000 to 7,100 levels.

The PSEi last week slipped 0.4 percent to 6,923.60 after the government kept the implementation of alert 4 in Metro Manila until October 15.

Sectoral indices ended mixed, with services and and industrials posting 1.3 percent and 0.40 percent week-on-week increase, respectively.

The property index fell 2.1 percent while financials, mining and oil and holding firms declined 1 percent, 0.4 percent and 0.4 percent, respectively.

Foreign investors were net sellers during the week by P1.52 billion, while the average daily value traded rose to P12.8 billion from the previous week’s average of P7.2 billion.

Weekly top price gainers were Semirara Mining and Power Corp., which advanced 17.7 percent to P22.30; GMA Network Inc., which climbed 13 percent to P15.90; and Universal Robina Corp., which gained 3.1 percent at P136.20.

Weekly top price losers were DoubleDragon Properties Corp., which dropped 10 percent to P10.42; Nickel Asia Corp., which fell 9.2 percent to P5.20; and Century Pacific Food Inc., which dipped 5.6 percent to P27.60.

Meanwhile, US stock indices rose at the end of Friday’s trading to end a rocky week that saw the third quarter end on a sour note.

Traders began the first session of the month and the fourth quarter pleased with news of a possible COVID-19 treatment, although the drama in Washington over raising the US debt limit was viewed as curbing some enthusiasm.

The benchmark Dow Jones Industrial Average finished 1.4 percent higher at 34,326.46. The broad-based S&P 500 gained 1.2 percent to hit 4,357.04.

The tech-rich Nasdaq Composite Index climbed 0.8 percent to 14,566.70.

September is both the last month for the third quarter and a notoriously rocky stretch for trading, and the combination of inflation and COVID-19 fears as well as Washington gridlock caused the Dow and Nasdaq indices to post losses for the quarter and the S&P 500 to see only a small gain. With AFP