Share prices are expected to test the 6,500-point level on optimism that more businesses will reopen after the government eased the lockdown over Metro Manila and neighboring areas.
Analysts said the investors will closely monitor President Rodrigo Duterte’s decision to extend or ease the community quarantine imposed in the Philippines.
The Inter-Agency Task Force on Emerging Infectious Diseases is set to meet with President Duterte and make recommendations on how the government will proceed in stopping the spread of COVID-19 in the country. President Duterte will announce the meeting after the meeting, in expected to make his decision.
Meanwhile, the dismal outlook on the US economy is expected to weigh on hopes of a local economic recovery.
The US Federal Reserve Board last week decided to keep the policy rates unchanged and its forecast of of 6.5 percent-contraction in the US economy.
“The week’s close at 6,476.24 highlights the market still has some gas to try the 6,500/6,800 levels in the near-term. However, a break below 6,230 levels will signal the retest of the 6,000 levels,” BDO Unibank Inc. chief investment strategist Jonathan Ravelas said.
The Philippine Stock Exchange Index last week surged 10.7 percent to 6,465.13, while the broader All Shares Index climbed 9.1 percent to 3,773.28.
All major counters ended in green led by financial, which advanced 15.7 percent, property which rose 13.5 percent, and mining and oil which advanced 13.4 percent.
Holding firms companies soared 11.2 percent, while industrial and services increased 6.8 percent and 2.5 percent, respectively.
US and European stocks, meanwhile, were higher Friday, recovering from a rout the previous day caused by rising coronavirus cases in the United States and data denting hopes for a strong recovery from the pandemic’s devastation.
The scale of the damage was highlighted by news that the British economy shrank 20.4 percent month-on-month in April, a sharp reality check after markets rallied significantly from their March lows.
Analysts said the figures were awful but unsurprising and will hopefully represent the bottom as far as economic activity. With AFP
On that score, US consumer confidence figures were surprisingly good, bolstered as states moved to begin easing coronavirus restrictions.
The University of Michigan consumer sentiment index jumped to 78.9 from 72.3 in May, much better than economists had expected.
“Consumer sentiment posted its second monthly gain in early June, paced by gains in the outlook for personal finances and more favorable prospects for the national economy due to the reopening,” said Richard Curtin, chief economist of the Survey of Consumers.
Curtin cautioned, however, that while consumers are expecting things to get better, few anticipate a return to normalcy “anytime soon.”
Wall Street stocks finished a topsy-turvy session solidly higher, but lower for the week overall.
Art Hogan, chief market strategist at National Securities, said the trend in coronavirus cases added to worries about excess stock valuations and still-weak economic data. With AFP