Watch for turning points

The market had a weekly loss of 122.4 points or 1.45 percent when it closed at 8,311.08 last week. Some interesting data from its performance during the week, however, showed this was not as bad as it appeared.

To review, it opened Monday very close to its all-time high, then eventually shaved off 103.46 points or 1.23 percent. Needless to say, stock prices were trading at the higher end of their price bands. Thus, market punters, especially foreign investors, decided it was time to profit.

As net sellers for the day and accounting for 56.91 percent of total transactions, foreign investors pulled the market southward.

Still, the market was able to bounce back on positive territory the next day, albeit with a very small day’s gain of only 49.62 points or 0.60 percent. What may have enabled the market to rebound was its higher-than-regular average value turnover for the day of P9 billion.

This time, foreign investors played a big role in the market’s recovery. Their trading activities stood bigger at 57.8 percent of total market transactions, with the overall result of their trading activities ending in net buying.

Yet, at the higher extreme of the price band, the market fell in the next two days.

On the last day of the week, the market rebounded with 104.64 points or a 1.28-percent gain. What made this development significant was that the rebound happened at a low value turnover, amounting to only P5.6 billion.

Normally, this small volume could hardly prop up the market. This could only mean that there were less sellers in the market. Or, it could be that stock prices were starting to appear too low to sell.

The news last Thursday about the economy’s growth in the third quarter may have changed sellers’ outlook as the market moved to close for the weekend. The economy was reported to have grown by 6.9 percent.

Interestingly, too, it was higher than the growth performance of China at 6.8 percent and Indonesia at 5.1 percent, respectively, during the period. Yet, this was a far second to Vietnam’s 7.5 percent.

The economy’s growth was led by the service sector, which accounted for 49.1 percent of national output. The industry sector was second, contributing 27.8 percent to the GDP.

Household consumption, on the other hand, remained a key factor in the economy. It accounted for 55.7 percent of GDP.

Great as these data were, they were not as good as last year’s statistics. For instance, the service sector only has a year-to-date record of 6.7 percent vis-a-vis last year’s 7.5 percent.

Industry only logged a nine-month growth rate of 7.1 percent, while it had a better performance of 8.5 percent in 2016.

Household spending was also tempered this year. So, too, was the growth in agriculture, hunting, forestry and fishing.

The rise in oil prices was blamed for the slowdown. Electricity and water rates were adjusted upward.

These and many more concerns about the economy’s “sliding” performance may take away the prospects of a market uptick soon. Add these variables to the dangers posed by increasing inflation, one should be prepared for any eventuality.

Yet, as what has been said, any point in the market could prove to be a turning point.