Market wary of new quarantine rules

Share prices are expected to move sideways this week with a downward bias as the expected recovery of the economy this year is threatened by the reimposition of some quarantine restrictions to curb the surging COVID-19 cases.

Analysts said investor were staying away from the market because of uncertainty caused by the spike in COVID-19 infections as well as the upcoming long holiday next week.

“As the country continues to grapple with the pandemic, expect risk-off trances to prevail,” online brokerage firm said.

BDO Unibank Inc. chief investment strategist Jonathan Ravelas said investors fear government’s move to reimpose stricter restrictions could further delay the economic recovery.

The government on Saturday reported a record 7,999 new COVID-19 cases in the country even if the vaccine rollout has already started.

OCTA Research earlier warned that daily infection rate could go up to an alarming 10,000 to 11,000 a day bu the end of March Metro Manila if the government would not consider stricter mobility restrictions.

Worries over higher inflation and rising US interest rates are also adding to investors’ woes, prompting them to sell stocks.

Investors expect the Bangko Sentral ng Pilipinas to keep policy rates in its next meeting this week. Investors, however, are interested on the central bank’s its medium- to long-term policy strategy considering the current economic environment.

“The week’s close at 6,436.10 signals the market could still test the 6,000/6,300 levels in the near-term. Any pullback if any is limited towards the 6,500/6,700 level,” Ravelas said.

The Philippine Stock Exchange Index last week sank 4.4 percent to 6,436 as the government reimposed some stricter restrictions to control the increasing COVID-19 infections.

All sectoral indices posted steep declines led by holding firms which fell 6 percent, property drop which dropped by 5.8 percent and services which declined 3.8 percent.

The average daily value turnover dipped to P8.25 billion while the average net foreign selling eased to P680 million. With AFP

Global stocks, meanwhile, fell Friday as the US Federal Reserve’s upbeat economic outlook was eclipsed by fears the recovery will fan inflation and push interest rates up sooner than expected.

Huge amounts of central bank and government stimulus have helped the global economy recover from last year’s virus-driven collapse.

Major central banks are now grappling with a rapid rise in bond yields, triggered by fears that stimulus-fueled inflation could herald rate hikes as economies reopen.

Heading into the weekend, the Frankfurt, London and Paris stock markets reversed Thursday’s gains to finish in the red.

On Wall Street, the Nasdaq prospered as traders bought up tech shares made cheap by a recent sell-off.  

The’s Fed announcement that a temporary rule allowing banks to exclude central bank deposits and Treasury bonds from capital requirements will expire at the end of the month triggered a sell off in bank stocks, sending the Dow and S&P 500 into the red at the close.

All three indices were lower for the week overall. With AFP

Topics: COVID-19 , BDO Unibank Inc , OCTA Research , Bangko Sentral ng Pilipinas , US Federal Reserve
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