THE stock market performed slightly better in October than in September with the decline of coronavirus disease 2019 (COVID-19) reproduction rates and reopening of the economy.
The 30-member Philippine Stock Exchange index (PSEi) dropped by 103.03 points or 1.43% to close at 7,054.70 on Friday, while the broader all shares index lost 34.06 points or 0.77% to end at 4,386.79.
Month on month, the PSEi gained 101.82 points or 1.5%, higher compared to its 1.4% gain in September.
The PSEi’s gains for the month was “largely brought about by the measures to further reopen the economy,” according to Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort in a Viber message on Sunday.
Mobility restrictions were gradually eased in the National Capital Region (NCR) last month as the government shifted to an alert level system in a bid to let more businesses operate and expand their capacity to boost economic activity. The capital was initially under Alert Level 4, which was downgraded to Level 3 on Oct. 16.
On Oct. 20, the government expanded the implementation of the alert level system to areas outside NCR.
The COVID-19 case count of 3,218 new infections on Oct. 27 was also the lowest in five months, while the highest daily count since the start of the pandemic was logged on Sept. 11 at 26,303.
“With the easing in restrictions together with the vaccine rollout, positive sentiment among investors was generated, such that the PSE index was able to break the psychological resistance of 7,000 level [last] month,” Diversified Securities, Inc. Equity Trader Ancient K. Pangan said in a text message.
“Gains were tempered, however, by concerns over the rising global oil prices” in the month of October according to Timson Securities, Inc. Trader Darren T. Pangan.
Oil prices in the world market have breached $80 per barrel, the highest levels since October 2018 when prices were a little less than $90.
In the Philippines, the prices of petroleum products have risen for nine straight weeks.
For this month, Mr. Pangan said the market “may continue to move upward, though volatility… will remain as global inflation heats up with the increase in oil prices plus continued supply disruptions due to the after effects of the pandemic virus on the global fronts.”
“Election-related developments would also be closely monitored by the markets for any new leads” in November, RCBC’s Mr. Ricafort added.
The last day for substitution of candidates for the May 2022 national elections is on Nov. 15.
Timson Securities’ Mr. Pangan said “6,900 seems to be the closest support level to watch, while the recent high at the 7,311 area seems to be the nearest resistance area to beat” in November. — B.A.D. Anago
