Downward bias seen this week

Analysts see the local market to consolidate on a downward bias as the continuous rise in coronavirus disease 2019 (Covid-19) cases weigh on recovery hopes.

“The local market is seen to have a downward bias as local coronavirus cases climb at an intensified scale, in turn weighing on the economic recovery investors have earlier hoped for,” Philstocks Financial Inc. research associate Japhet Tantiangco said.

He added the recent denial of ABS-CBN’s franchise renewal is “seen to raise concerns over political risks, which in turn could spill over to the rest of the market, especially to the heavily regulated ones.”

The anticipation of “dismal” second quarter corporate figures is also expected to add to the downside, Tantiangco said.

“Finally, US President Donald Trump’s remarks of having a ‘severely damaged’ damaged relationship with China due to the pandemic is seen to add to investors’ worries,” he added.

Meanwhile, Tantiangco said hopes on the positive new findings over Gilead Sciences’ Covid-19 treatment candidate remdesivir is expected to temper losses.

Tantiangco set the main index’s trading range from 6,100 to 6,350 this week, with a possible testing of the former.

Likewise, Diversified Securities Inc. trader Aniceto Pangan sees the market consolidating on a downward bias this week.

“(The) market (would) continue to consolidate on a downward bias depending on how they manage to control the spread and (the) extent of restrictions that may slow down the economic activity,” he explained.

Pangan also noted that the impact of the community quarantine imposed on the second quarter earnings of the companies would be seen.

Last week, the benchmark Philippine Stock Exchange Index marginally improved as it inched up by 0.08 percent or 4.8 points to 6,197.38 on Friday.