Index tracks deluge of political shifts

The local stock market performance is seen to be affected by political factors, both internal and external, analysts said on Monday.

During the mid-day break on the day of the third State of the Nation Address (SoNA), the index settled at 6,822.76, up 31.07 points, or 0.46 percent higher.

Investors are expected to watch for, particularly, the government's plans on how the local economy will hit the target in the short run and strengthen growth momentum in the long run, according to stock trader Philstocks.

“Issues that are of high interest may include the country's agricultural sector and food security, especially following the recent El Niño, the country's manufacturing sector, and tensions at the West Philippine Sea,” Philstocks Financial Inc. senior research analyst Japhet Tantiangco said in a Viber message.

It added that early numbers show the PSE index is trying to sustain its positive momentum in today's trading.

“However, given its rally, which is already running for four weeks, we may see some selling pressure down the road due to profit-taking,” he added.

Meanwhile, Regina Capital Development Corp. head of sales, Luis Limlingan, said SoNa affecting today’s trading is ‘hard to tell’ as this might be overshadowed by US President Joe Biden’s recent withdrawal from his re-election campaign.

On Sunday (US time), Biden announced dropping out of the presidential race and endorsed Vice President Kamala Harris to replace him as the Democratic candidate.

“So far, Harris might be the first choice, but it has to go through the process of being nominated by the Democratic National Party,” Limlingan said.

Moreover, Rizal Commercial Banking Corporation chief economist Michael Ricafort said this event may partly affect stock trading today.

“Though [a] possible Trump victory has already been priced in for about three weeks already or since their debate,” he noted, adding that another factor that may have affected the stock performance is the IT glitch last week.

He said the software disruption would be an excuse for profit-taking over the past three days in the US stock markets.