COVID-19, tensions with China to affect market
TRADING at the stock market this week will remain choppy as investors monitor the rising of coronavirus disease 2019 (COVID-19) cases in the country and recent tensions in the disputed West Philippine Sea.
The Philippine Stock Exchange index (PSEi) declined by 106.54 points or 1.6% to close at 6,545.17 on Thursday.
Week on week, the PSEi gained 102.08 points from its 6,443.09 close on March 31. Financial markets were closed on Friday last week in observance of the Day of Valor.
“The market’s been moving with a downward bias since peaking at a little above 7,400 in January. Investor sentiment has flowed and ebbed along with developments regarding the pandemic,” PNB Securities, Inc. President Manuel Antonio G. Lisbona said in a text message on Saturday.
“A surging case count has also contributed to the market’s gloomy mood,” Mr. Lisbona added.
The country logged 12,674 new coronavirus disease 2019 infections on Saturday, the second highest single-day tally thus far.
Metro Manila and nearby provinces have been under the strictest form of lockdown since March 29 as the government tries to curb the fresh surge in cases.
Analysts said for this week, the market will continue to monitor COVID-19 developments in the country.
“Market participants [will] continue to assess the COVID-19 situation in the country, as well as how the vaccine rollout plan comes into play,” Timson Securities, Inc. Trader Darren Blaine T. Pangan said in a Viber message on Sunday.
“Internationally, investors might employ a wait-and-see stance amid the recent tensions between the US and China over the West Philippine Sea,” Mr. Pangan added.
“The market will continue to be choppy,” PNB Securities’ Mr. Lisbona said.
Tensions are escalating over China’s move to mass militia vessels in disputed areas of the West Philippine Sea, with the US and Philippines expressing renewed concern and an investigation underway into reports that armed Chinese navy ships chased down a civilian craft carrying a Filipino news crew, Bloomberg reported.
The growing tension comes as Chinese vessels — initially numbering in the hundreds — were spotted at Whitsun Reef, prompting protests from Manila. The US last month said it stands by the Philippines while accusing China of using a “maritime militia to intimidate, provoke and threaten other nations.” China said last month that the ships were simply “taking shelter from the wind” and the Philippines should view the situation in a “rational light.”
For this week, Mr. Lisbona expects the main index to finish between 6,150 to 6,200. Timson Securities’ Mr. Pangan placed the PSEi’s support at 6,380 to 6,400, with 7,300 as the “major resistance area” for the index. — Keren Concepcion G. Valmonte with Bloomberg
