Profit-taking to check market rally

Share prices this week will continue to track a sideways movement, with investors likely to take profits after slight gains in the market due to prevailing uncertainties.

Analysts said while share prices of some blue chips had fallen to oversold levels, investors were still reluctant to buy and were opting to stay on the sidelines on weak economic prospects.

BDO Unibank chief investment strategist Jonathan Ravelas says investor sentiment has turned sour as the Bangko Sentral ng Pilipinas expects the industry and services sectors to contratct.

Ravelas says the BSP report, which expects manufacturing production to remain below the 50 point expansion threshold, suggests limited improvements in mobility indicators and that the public is opting to stay at home, which could affect retail sales and spending on other non-essentials. The negative factors will likely reduce consumption growth.

The Philippine Stock Exchange Index last week ended at 5,908.90, down nearly one percent from the previous week’s close, while the broader All Shares Index slipped 0.7 percent to 3,553,58.

Sectoral indices ended mixed, with mining and oil rose gaining 1.2 percent, property adding 0.4 percent and financials rising 0.3 percent.

The industrial index declined 2.8 percent while services and holding firms dropped 1.2 percent and 1.1 percent, respectively.

Foreign investors were net sellers during the week by P3.75 billion, while the average daily value traded stood at P5.8 billion from the previous week’s average of P4.7 billion.

Weekly top price gainers were MacroAsia Corp., which rose 6.8 percent to P4.99; Metrobank which advanced 5.6 percent to P36.50; and Alliance Global Group Inc., which climbed 4.6 percent to P7.25.

Weekly top price losers were Universal Robina Corp., which fell 7.5 percent to P134,;PLDT Inc., which declined 6.8 percent to P1,383; and Jollibee Foods Corp., which dipped 3.9 percent to P130.

Global stock markets, meanwhile, concluded on a lackluster note Friday as investors fretted over renewed coronavirus restrictions, the stuttering global economic recovery and US lawmakers' failure to agree on new stimulus measures.

In Europe, London, Frankfurt and Paris stocks all lost ground, while all three major US indices fell again to end the week with losses.

The downcast Wall Street session came as the United States cracked down again on TikTok, heightening tensions with China.

"Continued drama in Washington added to the mix, amid the looming highly contentious presidential election and a non-existent fiscal relief package," a note from Charles Schwab said.

But it is the ongoing Covid-19 pandemic that continues to spook investors, and a swathe of fresh spikes around the world prompted the reimposition of containment measures including lockdowns.

"Coronavirus dominated the session," said Spreadex analyst Connor Campbell, saying a raft of new restrictions, notably in northeastern England, penalized stocks. Owner of British Airways IAG was hit particularly hard, giving up 14.6 percent in the latest sign of the virus's blow to the aviation industry.

Britain's government warned it could impose further restrictions  across England to combat rising infections, noting hospitalization rates are doubling every eight days. With AFP