Stock market still wary over rising COVID cases

Shares prices are likely to trade sideways this week as the market struggles to stay above the 7,000 point level.

Analysts said the steady rise in COVID-19 cases in the country is tempering investors’ optimism on the domestic economic recovery, even as the government starts easing mobility restrictions.

Investors are also weighing in on the sluggish vaccination rate in the country compared with those in neighboring countries.

“The hasty retreat back to 6,900 level does not fully imply that the 7,000 psychological barrier is too tough of a resistance to crack, at least in the near term. In fact the rejection has been relatively mild and the technical trend remains mostly intact,” online brokerage firm 2TradeAsia.com said.

“However pending catalysts that can push market conviction to much higher terrain, such as macro stimulus programs from the fiscal side or comfortable downtrend in COVID infection numbers, the bias is for the market to go sideways,” it added.

After five straight weeks of gain, the Philippine Stock Exchange Index last week slipped 0.8 percent to end the week at 6,912.85.

Except for services index which rose 0.6 percent, all sub-indices ended lower led by mining and oil which dropped 3.7 percent; property which declined 2.2 percent, and holding firms which fell 0.8 percent.

Foreign investors were net buyers for the week by P2.6 billion, while the average daily value traded jumped to P13.2 billion from the previous week’s average of P5.1 billion.

Weekly top price gainers were Aboitiz Power Corp., which climbed 12.2 percent to P32.65; Monde Nissin Corp., which rose 11.5 percent to P19.50; and Aboitiz Equiy Ventures Inc., which advanced 8.7 percent to P50.

Weekly top price losers were Cebu Air Inc., which declined 8.8 percent to P40; Philex Mining Corp., which dropped 6.9 percent to P5.35; and GT Capital Holdings Inc., which fell 6.6 percent to P30.

Meanwhile, US and European stock markets fell on Friday as investors digested mixed economic data, uncertainty over monetary policy and concerns about the spread of the Delta variant of COVID-19.

London’s FTSE 100, the Frankfurt DAX 30 and the Paris CAC 40 all closed lower after rising earlier in the day, while Wall Street finished with a solid loss to send major indices into the red for the second straight week.

Asian markets, however, headed into the weekend on an upbeat note.

“September appears to be living up to its sluggish reputation,” said analysts at Charles Schwab brokerage.

US “markets have appeared to lack conviction near record highs amid uncertainties regarding the Delta variant, global monetary policy tightening timing, fiscal stimulus and persistent supply chain challenges,” they said in a note.

US data released in recent days showed moderating consumer inflation and better-than-expected retail sales in the world’s leading economy.

Investors have weighed those reports against the ongoing health and supply chain concerns, together with uncertainty over an expected Federal Reserve move to soon taper stimulus spending.

Investors are turning their attention to this week’s Federal Reserve policy meeting. With AFP