Stocks are expected to move on narrow range as investors weigh concerns on rising coronavirus (COVID-1) cases in the country, which could result in the possible reversion of Metro Manila to stricter quarantine rules.
The government earlier warned that Metro Manila may revert back to the modified enhanced community quarantine if the COVID 19 cases continue to rise in the capital region in the next two weeks.
Analysts said the reversion of Metro Manila could delay the recovery of the domestic economy.
Online brokerage firm 2TradeAsia.com said initial indicators including, an increase in unemployment rate and the decline in overseas remittance, already pointed to a deeper slump compared with a 0.2-percent contraction in the first quarter.
Two consecutive quarters of contraction will put the economy into recession. The last time the Philippine economy went into a recession was in 1998.
“This rhetoric may not be new to markets but history has shown how funds can be more prone to knee-jerk reactions, volatility to the downside may be there to stay,” the online brokerage company said.
In the face of a possible break from the critical 6,000-point support level, 2TradeAsia said investors should be more prudent with their trades. It placed the index support at at 6,000 and the resistance at 6,400.
The Philippine Stock Exchange Index last week dropped 1.7 percent to 6,088.75, while the broader All Shares Index declined 2 percent to 3,579.60 as the market showed sign of losing steam.
All sub-indices ended in the red led by mining and oil, which fell 4.2 percent, industrial which dropped 3.2 percent and financials which declined 1.9 percent. Holding firms, property and services also decreased 1.0percent, 1.35 percent and 1.26 percent, respectively.
Foreign investors were net sellers last week by P3.72 billion while the average daily value traded stood at P5.1 billion.
Weekly top price gainers included Emperador Inc., which rose 7.2 percent to P8.98, Filinvest Development Corp., which climbed 5.8 percent to P9, and 8990 Holdings which added 3.8 percent to P9.45.
Weekly top price losers were Cirtek Holdings Philippines, which dipped 11.6 percent to P6.57, Lopez Holdings which decreased 8.6 percent to P2.43 and GMA Network Inc., which fell 8.3 percent to P5.53.
Meanwhile, Europe’s main stock markets moved in mixed directions on Friday as traders watched EU leaders hunker down to try to thrash out the terms of a huge post-coronavirus economic rescue plan.
Frankfurt’s DAX 30 ended the day 0.4 percent higher while in Paris the CAC 40 shed 0.3 percent.
Outside the eurozone, London’ benchmark FTSE 100 index ended the day 0.6 percent higher. Wall Street stocks finished a choppy session mostly higher, though streaming giant Netflix tumbled following disappointing results.
“It was been a quiet trading session as the much-awaited EU summit to discuss the rescue fund began today,” said market analyst David Madden at CMC Markets UK.
The European Union was facing a “moment of truth,” France’s President Emmanuel Macron declared Friday.
EU leaders were holding their first face-to-face summit in five months, but the gathering seems unlikely to bridge their divide over a huge 750-billion euro ($847 billion) recovery fund. With AFP