THE uncertainty over the reimposed enhanced community quarantine (ECQ) in Metro Manila and nearby provinces Bulacan, Cavite, Laguna, and Rizal coupled with a surge in coronavirus disease 2019 (COVID-19) infections are anticipated to cloud investor sentiment this week.

The Philippine Stock Exchange index (PSEi) shaved off 102.46 points or 1.56% to 6,443.09 on Wednesday.

Week on week, the PSEi declined by 101.54 points from its 6,544.63 close on March 26.

Trading was cut short as the country observed Holy Week, prompting the market to close on Thursday and Friday.

“Next week, we still see a downward bias for the local market as our COVID-19 situation continues to worsen,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message on Saturday.

“The continuous surge in our COVID-19 case count is seen to weigh on the market due to its negative impact on consumer and business confidence,” he added.

The Philippines logged a record of 15,310 new COVID-19 cases on Friday, the country’s highest single day tally so far. On Saturday, 12,576 new infections were reported.

The country has since recorded 784,043 COVID-19 infections, 165,715 of which are active cases.

On Saturday evening, the Office of the President approved the recommendation of the government’s coronavirus task force to extend the lockdown measures for another week.

“Though the recommendation is appropriate [in] this circumstance, we may see the [market continue] its downtrend with the ECQ mobility restrictions and infection rates on the rise,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message on Sunday.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC), said over text message on Saturday that the extension of the ECQ “has been widely expected and may have already been priced in by the markets” ahead of the Holy Week trading break.

“ECQ’s duration uncertainty and economic recovery delay are the market’s top worries,” First Metro Investment Corp. Head of Research Cristina S. Ulang said in a separate Viber message on Saturday.

Philstocks Financial’s Mr. Tantiangco said he expects investors to use the country’s March consumer price index data as their reference for trading activities.

“A further rise in our inflation rate is seen to add to the downside risk of the market,” Mr. Tantiangco said.

“Mitigants are news about the vaccination drive gaining speed and the lockdown tempering the daily cases,” Ms. Ulang said.

“This will take time and so PSEi will be on a lower range trading mode but bargain hunting will provide support,” she added.

RCBC’s Mr. Ricafort placed the index’ support at 6,400, which he said would “help prevent further downward correction towards the 6,000 to 6,200 levels.” Meanwhile, Diversified Securities’ Mr. Pangan expects the market to move between 6,200 to 6,325.

“The local market’s support is seen at 6,100. Its immediate resistance is seen at its 10-day exponential moving average which closed last week at 6,540.19. After the 10-day EMA, the market’s next resistance is seen at 6,600,” Mr. Tantiangco said. — Keren Concepcion G. Valmonte