Market to monitor GDP data, COVID-19 situation

INVESTORS are expected to continue monitoring the country’s coronavirus disease 2019 (COVID-19) situation, with several areas under the strictest form of lockdown due to rising cases, as well as the release of second quarter gross domestic product (GDP) data on Tuesday.

The 30-member Philippine Stock Exchange index (PSEi) inched down by 7.36 points or 0.11% to close at 6,539.91 on Friday. Meanwhile, the broader all shares index went up by 12.85 points or 0.31% to finish at 4,055.42.

Week on week, the PSEi climbed 269.68 points from its 6,270.23 finish on July 30.

“Bargain hunting lifted the local market this past trading week by 4.30%,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message on Saturday.

“The rally was supported by optimism towards the second quarter corporate reports which have shown good results primarily due to low base effects,” he added. “This past trading week’s climb was also supported by foreign investors, with foreign net flows amounting to P397.61 million.”

“During the second half of the week, the market took a breather as participants chose to stay cautious while monitoring how the Delta variant’s global spread will affect our economic prospects,” Timson Securities, Inc. Trader Darren Blaine T. Pangan said in a Viber message on Saturday.

For this week, investor focus will be on the country’s COVID-19 situation and upcoming economic data.

“Investors are expected to monitor our COVID-19 situation following the recent rise in case counts, and the detection of more cases with the infectious Delta strain,” Philstocks Financial’s Mr. Tantiangco said. “A sustained surge in our COVID-19 case counts, and a detection of more Delta variant cases may cause a decline in the local bourse since it raises the risks of prolonging the strict quarantine measures in the parts of the country where it is implemented.”

The Health department reported 11,021 new cases on Saturday to bring active infections to 76,063.

“[The] market [is] still on a losing streak, but [it’s] tempering ahead of the second-quarter GDP growth release [this] week, [which is] expected to show Philippine exit from recession,” First Metro Investment Corp. Head of Research Cristina S. Ulang said in a Viber message on Friday.

“If a slow [year-on-year] growth is seen for our economy this second quarter, then it may also give rise to negative sentiment in the market,” Philstocks Financial’s Mr. Tantiangco added.

A ����ý poll of 20 economists yielded a median GDP growth estimate of 10.6% in the second quarter mainly due to base effects. If realized, this would mean the country’s exit from recession and a first half growth print of 2% — still below the 6-7% target of the government for 2021.

Mr. Tantiangco placed the market’s support at 6,400 with a resistance of 6,600, while Timson Securities’ Mr. Pangan expects a trading range of 6,270 to 6,600. — K.C.G. Valmonte