Stock market regrouping, building new momentum

Share prices are expected to expected to move sideways during this shortened trading week after a huge correction last week, with the index starting to build a momentum back to the 7,000-point level.

BDO Unibank Inc. chief investment strategist Jonathan Ravelas said the market’s recent run-up had been steep and made valuations quite expensive despite lack of earnings visibility.

Given the market’s recent correction, Ravelas said the index could further weaken toward the 6,700-point mark, adding any rebound would be limited toward the 7,000 level.

First Metro Investments Corp. said sustaining the upward momentum requires more positive news, such as accelerating growth, job creation, positive earnings of listed companies, free movement for workers and sufficient liquidity among firms.

The passage of crucial recovery bills to assist firms, specially, micro, small and medium enterprises should add to this catalyst.

After four consecutive of weekly gains, the Philippine Stock Exchange Index plummeted 5.28 percent, dropping by 378 points to close at 6,791 on profit taking.

Except for mining and oil index, which rose 3.5 percent, all sectors registered week-on-week declines led by holdings firms, which fell 6.4 percent,; property which dropped 5.8 percent; and services which dipped 3.7 percent.

Average daily value turnover rose to P16.4 billion, while average daily net foreign selling rose to P1.56 billion.

Weekly top price gainers were Petron Corp., which advanced 13 percent to P4.27; Macay Holdings Inc., which jumped 12.3 percent to P8.99; and Vista Land & Lifescapes Inc., which rose 11 percent to P4.75.

Weekly top price losers include SM Investments Corp., which declined 8.2 percent to P970; Ayala Land Inc., which fell five percent to P38; and Bank of the Philippine Islands to P83 which dropped 4.6 percent to P83.

Meanwhile, major US stock indices drifted to fresh records Friday as markets continued to look past rising coronavirus cases toward a better 2021 economy with likely vaccines.

The S&P 500 and Nasdaq notched all-time highs, while the Dow edged higher, joining European equity markets, which earlier won modest gains.

Many US traders had taken advantage of the Thanksgiving holiday on Thursday to give themselves a long weekend.

“We look set for a quiet end to the week,” said CMC Markets analyst Michael Hewson.

“This end-of-week caution appears to be predicated on concern over the short-term economic outlook, as the extension of tighter restrictions on economic activity in France, Germany and the UK creates further uncertainty over the potential for permanent economic scarring as we head into 2021.”

Asian markets maintained their upward momentum Friday as investors took heart from the prospect of vaccines being rolled out in the coming weeks.

Hopes are high that, with at least three in the pipeline, life can begin to get back to normal next year and give the battered global economy a much-needed boost.

“The vaccine story is undoubtedly good news; however, there is some concern as to what the economic landscape will look like when we come out of the other side of winter,” cautioned Hewson. With AFP