Stocks may drop as PHL logs record virus cases

STOCKS may decline this week as investors remain cautious and monitor the coronavirus disease 2019 (COVID-19) situation after the country logged record cases.

The Philippine Stock Exchange index (PSEi) shed 85.29 points or 1.26% to close at 6,633.22 on Friday, while the broader all shares index went down by 17.91 points or 0.43% to end at 4,123.72.

Meanwhile, week on week, the PSEi climbed by 313.03 points from its 6,320.19 finish on Aug. 13.

“Market participants… seemed to stay cautious and took profits off the table before the weekend,” Timson Securities, Inc. Trader Darren Blaine T. Pangan said in a Viber message on Friday.

“Optimistic sentiment influenced the market [last] week, as investors welcomed the release of the last few corporate earnings results, as well as the positive remittance report for the country,” Mr. Pangan said.

This week, analysts expect investors to continue monitoring the country’s COVID-19 situation after quarantine restrictions were eased even as daily infections continued to go beyond 10,000.

The government’s pandemic task force eased lockdown restrictions in Metro Manila and Laguna to a modified enhanced community quarantine until Aug. 31.

Still, in-person restaurant services and personal care services are not allowed in Metro Manila and Laguna, while religious gatherings should remain online.

On Friday, the Health department reported a record 17,231 new COVID-19 infections as well as the highest daily death toll in the last four months with 317 fatalities.

Another 16,694 new infections were logged on Saturday, bringing the country’s tally to 1,824,051 cases. Active COVID-19 cases stood at 123,935 and the positivity rate was at 25.2%, inching down from the record 26.1% seen the previous day.

“If this trend continues, the local bourse may decline since a further worsening of our COVID-19 situation raises the risk of the strictest quarantine measure being implemented in parts of the country again,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a separate Viber message on Saturday.

“A sustained significant slowdown in cases may give rise to positive sentiment since it raises the possibility of our economy reopening further,” Mr. Tantiangco said.

“[This] week, market participants may look forward to how the COVID-19 cases in the country [progress],” Timson Securities’ Mr. Pangan said.

Mr. Pangan expects the market to trade between 6,240 to 6,840 this week, while Philstocks Financial’s Mr. Tantiangco said the market may test the 6,600 level.

“If this level holds, then it would be seen as the local bourse’s new support while resistance would be at 6,900. If the market fails to hold the said level, however, it may trade with support seen at the 6,350 to 6,400 range and resistance at 6,600,” Mr. Tantiangco added. — K.C.G. Valmonte

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