SHARES are expected to move sideways this trading week as investors await the release of 2020 gross domestic product (GDP) data on Thursday.

The bellwether Philippine Stock Exchange index (PSEi) ended at 7,045.83 on Friday, lower by 94.46 points or 1.32% from the previous trading day.

Week on week, the main index retreated 192.63 points or 2.66%, extending its decline.

The market’s average value turnover for the week rose 21% to P12.68 billion, while average net foreign selling expanded to P964.48 million.

Timson Securities, Inc. Head of Online Trading Darren Blaine T. Pangan said in a mobile phone message that the market may move sideways this week as investors wait for the release of data on the economy’s performance last year.

He said trading this week will also depend on the ongoing spread of the coronavirus disease 2019 (COVID-19) in the country.

“Over the longer term perspective, investors continue to assess the coronavirus vaccine rollout especially amid the increase in cases in some provinces of the country,” Mr. Pangan said.

Recent bulletins from the Department of Health showed some of the provinces that posted the most number of new COVID-19 cases include Davao City, Isabela, Bulacan, Rizal, Cebu City, and Mountain Province.

Online brokerage 2TradeAsia.com said in a market note that the GDP data will push anticipation-driven volatility in the next few sessions.

“The economic team expects -5.5%; World Bank at -8.15%, while the Bangko Sentral ng Pilipinas (BSP) expects a more conservative -9%,” 2TradeAsia.com said.

“While negative figures may have already been baked-in in share price, any downside surprise will be detrimental to already directionless sentiment, particularly for cyclicals and recovery-correlated shares,” it added.

Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said the market is seen to decline amid waning optimism and amid developments regarding the new COVID-19 variant.

“The further spread of the new strain in the country is expected to weigh on market sentiment since it poses the risk of returning to the more stringent social restriction measures, which is seen to derail our economic recovery,” Mr. Tantiangco said in a mobile phone message.

2TradeAsia.com said the market’s immediate support will be at 7,000, secondary at 6,850, and resistance at around 7,300 to 7,350.

“7,000 remains the support area that we have to watch, with 6,800 being the next major support level. 7,300 on the other hand is where resistance may be pegged at,” Timson Securities’ Mr. Pangan said.

“The PSEi may test its 50-day exponential moving average, a dynamic support, which is currently at 7,005.71. If it falls below that line, the market’s next support is seen at 6,900. Resistance on the other hand is seen at the 7,150-7,200 range,” Philstocks Financial’s Mr. Tantiangco said. — Revin Mikhael D. Ochave

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