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Friday, March 29, 2024

Stock market poised to trade below 6,000

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Share prices are expected to remain below the 6,000-point level as concerns over the impact of the prolonged pandemic on the domestic economy continue to weigh on the market.

Online brokerage firm 2TradeAsia.com said the index would continue to trade in a narrow range, with investors cautious about the recovery of the economy given the increase in the number of coronavirus (COVID-19) infections.

“Moves to raise hospitality capacity and isolation zones would help appease concerns on the local economy’s ability to handle COVID-19, in light of calls to have more industries re-opened,” the brokerage firm said.

“Given this, it might take time before economic numbers reverse to positive terrain, unless strategic plans on health infrastructure support are outlined while waiting for vaccines,” it added.

The worse-than-expected second-quarter gross domestic product data is magnified by the steep decline in second quarter-earnings of listed companies.

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The 30-company Philippine Stock Exchange Index last week fell 1.4 percent to 5,846.02 after the government reported GDP in the second quarter of the year contracted 16.5 percent from a year ago.

Three out of six sectoral indices closed higher during the week, led by mining and oil which rose 5.7 percent, industrial which climbed 3.3 percent and services which added 3 percent.

Property dropped 3.5 percent, while holding firms and financial declined 2.9 percent and 1.5 percent, respectively.

Foreign selling accelerated to P8.9 billion, while the average daily value traded hit P7 billion.

Weekly top price gainers included Universal Robina Corp., which advanced 10.6 percent to P135.40, Century Pacific Food Inc., which rose 9.1 percent to P15.80, and International Container Terminal Services Inc., which  climbed 7.6 percent to P103.90.

Weekly top price losers were Robinsons Land Corp., which dropped 10.3 percent to P13.80, GT Capital Holdings Inc., which declined 8.7 percent to P400.60, and 8990 Holdings Inc., which fell by 7.7 percent to P8.16.

Meanwhile, Wall Street stocks finished mixed Friday, with the Nasdaq retreating from records, following data showing the US economy adding jobs as US-Chinese tensions mount and a standoff over fresh stimulus continues.

The monthly US non-farm payrolls market report had been eagerly awaited as the first important indication of how a recent surge in infections that has sparked a second round of business closures has affected the economy.

The report showed that the US economy added 1.8 million jobs in July, far fewer than in May and June, but more than economists had been expecting.

Meanwhile the unemployment rate fell to 10.2 percent from 11.1 percent, also better than consensus expectations.  

However that still leaves the unemployment rate at slightly worse than the depth of the global financial crisis in October 2009 and fewer than half of the 22 million payroll jobs lost during the pandemic have been regained.

The employment report “can fairly be labeled better than feared,” said Briefing.com analyst Patrick J. O’Hare.  With AFP

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