STOCKS could move sideways this week on expectations that the government would further ease mobility restrictions as cases drop and amid the release of companies’ earnings results.
The 30-member Philippine Stock Exchange index (PSEi) lost 22.11 points or 0.30% to close at 7,289.61 on Friday, while the broader all shares index went down by 12.22 points or 0.27% to end at 4,462.70.
“Philippine shares traded slightly lower as investors weighed the lower-than-expected earnings reports… against the release of strong jobs data,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.
The S&P 500 and Nasdaq closed lower on Friday as disappointing quarterly reports from Snap, Inc. and Intel Corp. put pressure on the communications and technology sectors and investors turned skittish as Federal Reserve Chair Jerome Powell discussed stimulus tapering, Reuters reported.
The Dow Jones Industrial Average rose 73.94 points or 0.21% to 35,677.02; the S&P 500 lost 4.88 points or 0.11% to 4,544.90; and the Nasdaq Composite dropped 125.50 points or 0.82% to 15,090.20.
Still, all three indexes notched a third straight week of gains for the first time since early July, with the S&P adding 1.6% for the week while the Dow climbed 1.1% and the Nasdaq advanced by 1.3%.
Meanwhile, data from the US Labor Department on Thursday showed that jobless claims went down by 60,000 to 290,000 from 350,000 the previous week.
Still, week on week, the benchmark PSEi went up by 76.15 points from its 7,213.46 finish on Oct. 17.
This increase was on the back of the easing of restrictions in Metro Manila to Alert Level 3 from Level 4 amid the decline in coronavirus cases, Timson Securities, Inc. Trader Darren Blaine T. Pangan said.
“Investors’ confidence improved as the government implemented the Alert Level System to other growth center regions,” Papa Securities Corp. Equities Strategist Manny P. Cruz said in a mobile message.
For this week, Timson Securities’ Mr. Pangan said the outlook is positive as the coronavirus transmission rate continues to go down, which is fueling expectations of a further easing in the restrictions.
OCTA Research fellow Guido David in a social media post on Saturday said the capital’s weekly coronavirus case average went down to 996 or lower than 1,000 “for the first time since July 22 to 28” in the week of Oct. 18 to 23.
The Health Department on Thursday said restrictions in Metro Manila may be downgraded to Alert Level 2 as coronavirus cases continue to decline.
Investors may also look at upcoming US economic reports, such as the gross domestic product data of the world’s largest economy, Mr. Pangan added.
“7,070 seems to be the closest support area, while 7,500 is where we may peg the next resistance to watch,” he said.
Regina Capital’s Mr. Limlingan said “investors may probably take cues from earnings that will slowly be released.” — B.A.D. Añago with Reuters