LOCAL SHARES are expected to remain volatile this week as more parts of the country reimplemented curfews to limit movement amid rising coronavirus disease 2019 (COVID-19) infections.

The benchmark Philippine Stock Exchange index (PSEi) went up by 9.37 points or 0.13% to close at 6,728.55 on Friday.

Week on week, however, the local bourse declined by 152.82 points from its 6,881.37 close on March 5.

“The local index headed lower [last] week, which we think is largely due to the recent spike in COVID-19 case counts and investor caution around prospects of further [government] action, such as a Metro Manila-wide curfew,” China Bank Securities Corp. Research Head Rastine Mackie D. Mercado said in an e-mail on Friday.

“Data releases [last] week also weighed on investor sentiment as January’s unemployment rate remained unchanged from October 2020, and factory output figures continued to decline through January,” Mr. Mercado added.

“[The] two-week curfew in Metro Manila… [and the] granular lockdown in some localities, communities, households and proposed checkpoints, could prevent COVID-19 from spreading, but could reduce business or economic activities,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message on Saturday.

The Health department reported 5,000 new COVID-19 cases on Saturday, the highest single-day tally in seven months.

Meanwhile, the Philippine Statistics Authority last week released the preliminary results of the January round of the Labor Force Survey, which showed that around 3.953 million Filipinos are unemployed. The result put the country’s unemployment rate at 8.7%, steady from October but higher than the 5.3% posted in January 2020.

For this week, Mr. Ricafort said the progress of the COVID-19 vaccine rollout in the country and abroad will continue to affect investor sentiment, with the market also expected to monitor government initiatives meant to help the economy.

He placed the PSEi’s support at 6,600, while he expects resistance to finish at around 6,800.

“Some bottom fishing or bargain-hunting activities have taken place for more than a month already,” Mr. Ricafort said.

Meanwhile, China Bank’s Mr. Mercado expects the index to finish above the 6,700 levels this week, with the resistance seen at 6,900.

“Heading into the next trading week, we expect volatility to persist as investors try to balance their cautiousness around short-term risks, rising case counts, and optimism from the medium-term recovery outlook as the vaccination program moves into full swing in [the second half of the year],” he added.

“Prospects of more restrictive quarantine measures are also seen to curb the likelihood of strong gains next week as investors pare down their buying activity,” Mr. Mercado said. — Keren Concepcion G. Valmonte