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Stock market eyes Q2 earnings

Share prices are expected to trade sideways over the near term period, with investors likely to take profits ahead of the release of second-quarter earnings of listed companies.

BPI Securites Haj Narvaez said in a recent briefing some technical indicators had turned slightly south over the last few days, signifying the market was losing its upward momentum.

Narvaez said investors were likely to stay on a wait-and-see mode ahead of the release of second-quarter earnings. They expect negative earnings results due to the lockdown.

Listed companies reported an average decline of 25 percent in the first quarter of the year. Narvaez said the second quarter could reflect an average of 50-percent decline in earnings as the lockdown lasted longer than expected.

He said investors wanted to see how the COVID-19 case count would progress, with the second wave in some countries likely to dampen overall sentiments.

Stock picks of BPI Securities, meanwhile, include PLDT Inc., Century Pacific Food Inc. and Cirtek Holdings Philippines Corp., which have been benefitting from work-from-home arrangement because of the pandemic.

The Philippine Stock Exchange Index last week fell 2.5 percent to 6,315.07 while the broader All Shares Index dropped 3 percent to 3,684.55.

All major sub-indices ended on the negative territory, led by industrial which declined 5.3 percent, mining and oil which lost 4.4 percent and property which fell 4.3 percent.

The services index decreased 3.3 percent, while the financials and holding firms dropped 3.2 percent and 0.2 percent respectively.

Foreign investors were net sellers for the week by P5.08 billion, while the average daily value traded stood at P9.3 billion from P8.5 billion in the previous week.

Meanwhile, Wall Street stocks suffered their second rout in three sessions Friday as surging coronavirus cases prompted large US states to impose new public health restrictions, threatening the economy’s recovery from widespread business shutdowns.

Major US indices fell around 2.5 percent or more to finish the week in the red after Texas and Florida ordered bars to stop serving alcohol on site, along with other measures intended to halt a huge jump in virus cases.

Earlier, European bourses finished mostly lower, while oil prices fell on worries about weakening demand.

Investor confidence in a US economic recovery is “being stymied by lingering COVID-19 concerns as new cases persist,” said analysts at the Charles Schwab brokerage.

Texas and Florida are two of the most-populous states in the country and together home to 50 million people. Other southern and western states, including Arizona and Georgia, have also seen big jumps in cases.

“We are facing a serious problem in certain areas,” top infectious disease expert Anthony Fauci said Friday as the Trump administration’s coronavirus task force held its first public briefing in two months.

Stocks were volatile last week as investors try to assess the implications of the current phase of the coronavirus crisis and whether it will be as devastating to the economy as the shutdowns earlier this year. With AFP

Topics: Stock Market , Philippines Stock Exchange , PSE , Philippines Stock Exchange Index , PSEi , Global stock market , coronavirus disease 2019 , COVID-19
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