The local market closed the week in negative territory as cautious investors awaited the government’s plan on how it intends to jumpstart the economy as the coronavirus disease 2019 (COVID-19) pandemic drags on.
On Friday, the benchmark Philippine Stock Exchange index (PSEi) fell 25.75 points or 0.42% to close at 6,003.26 while the broader all-shares index declined 7.01 points or 0.19% to end at 3,533.01.
In a text message, Philstocks Financial, Inc. Research Associate Piper Chaucer E. Tan said that market investors were awaiting the economic policies that President Rodrigo R. Duterte might announce during his fifth State of the Nation Address (SONA) on July 27.
“I think the President’s SONA on Monday will be a major catalyst as investors might want to take cues on how the government will address virus containment issues and economic policies for businesses and economic activity and for people to adjust to the new normal,” Mr. Tan said.
On Thursday, the Department of Health reported 2,200 new COVID-19 cases, which brought the country’s total number of infected to 74,390 cases.
Timson Securities, Inc. Head of Online Trading and Trader Darren Blaine T. Pangan said the local market on Friday managed to close above 6,000 despite going as low as 5,968.72 during the trading day, amid rising tensions between the United States and China.
“Market sentiment turned sour across the region as China retaliated by ordering the United States to close its consulate in Chengdu,” Mr. Pangan said in a text message.
This is after China directed the US to shut down its consulate in Chengdu City in the Sichuan province.
China’s move is in response to a recent demand by the US for Beijing to close its consulate in Houston, Texas within 72 hours.
On Friday, the market’s sectoral indices had varying results.
Property retreated 47.03 points or 1.58% to 2,924.5; services went down 8.67 points or 0.61% to 1,392.39; and holding firms shrank 21.56 points or 0.34% to 6,268.98.
Meanwhile, mining and oil rose 74.03 points or 1.46% to 5,130.44; industrials climbed 54.69 points or 0.75% to 7,336.79; and financials picked up 1.82 points or 0.15% to 1,183.62.
Decliners outpaced advancers 93 to 91, while 46 names ended unchanged.
Net foreign selling was at P10.04 million against Thursday’s close at P710.59 million.
“It is worth noting that foreigners, however, turned net buyers today after 14 consecutive days of being net sellers,” Mr. Pangan said.
Value turnover stood at P2.94 billion with 1.31 billion issues switching hands, lower than P4.27 billion with 1.61 billion issues on Thursday.
Philstocks’ Mr. Tan projects market support for next week at around the 6,000 level.
“However, if quarantine measures will revert to stricter measures then we expect the market to fall down at 5,400 levels while resistance for the market is pegged at 6,400 for next week,” Mr. Tan said.
On the other hand, Timson Securities’ Mr. Pangan said that investors may have to observe next week if the market bounces off the 6,000 critical support area.
“If the index goes beyond the 6,000 level, next immediate support may be at 5,950 and eventually the 5,750 level. Immediate resistance may be placed at 6,150,” he said.
Source: By Revin Mikhael D. Ochave|BusinessWorld
Source: Peso Economics
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