Market players are increasingly placing a bet on a quick global recovery but shares closed weaker yesterday on immediate concerns of climbing coronavirus cases globally.
Oil hit an 11-month high towards $57 a barrel as tighter supply and expectations of a drop in United States (US) inventories offset concerns over an upsurge of infections, according to Regina Capital Development Corp. managing director Luis Limlingan.
Brent crude was 80 cents, or 1.4 percent, higher at $56.44 a barrel and earlier hit $56.75, the highest since last February. US West Texas Intermediate settled 1.8 percent, or 96 cents, higher at $53.21 per barrel.
The index closed at 7,242.85, down 15.26 points or 0.21 percent after moving in a range of 7,233.99 and 7284.60. Exchange volume of trades hit 179,017 shares valued at P8.816 billion.
Gold prices edged higher in choppy trading as the US dollar and Treasury yields eased, while prospects of higher inflation driven by more US fiscal stimulus provided further support to the metal. Spot gold was up 0.2 percent at $1,848.31 per ounce.
Base effect pushes earnings
East West Bank trust officer Angel Marie Pacis said the market may retest the 7,100 level in the next 2 weeks, with strong support at 6,700.
“We see a 15 percent corporate earnings growth this year, mostly as a result of the low base effect from last year,” she explained.
The index may range near 7,800 by year’s end, Pacis said as she expects a lot of volatility in between.
“Over the next two weeks, expect a technical breather as people start to worry about prospects of rising rates, inflation, logistics and efficacy issues of the vaccines.”
Asian stocks rose tracking modest Wall Street gains, as expectations that a vaccine will eventually win the battle against the coronavirus fueled recovery hopes.