LOCAL SHARES are expected to rally this week as investors wait for the government’s announcement on quarantine measures to be implemented in Metro Manila.

The bellwether Philippine Stock Exchange index (PSEi) fell 20.87 points or 0.34% to end at 6,076.91 on Friday, which broke the local market’s four-day winning streak.

Net foreign buying reached P516.25 million on Friday while value turnover was at P9.46 billion, with 6.80 billion shares changing hands, against Thursday’s P17.15 billion worth of 1.35 billion shares.

Philstocks Financial, Inc. Research Associate Piper Chaucer E. Tan said in a mobile phone message that the market may move to positive territory this week as a result of optimistic investor sentiment in light of the upcoming announcement by President Rodrigo R. Duterte on quarantine measures in Metro Manila.

“The market may rally towards and will move at our forecasted range for this week at the 6,000 to 6,300 range due to the positive sentiment of moving the nation’s capital to general community quarantine, which more businesses are allowed to operate,” Mr. Tan said.

Metro Manila and the nearby provinces of Bulacan, Laguna, Cavite, and Rizal were placed under stricter lockdown protocols for two weeks until Aug. 18 due to requests from medical frontliners for a respite amid rising cases of coronavirus disease 2019 (COVID-19).

The request aims to provide the government an opportunity to curb the growing number of COVID-19 cases in the capital.

Mr. Duterte is expected to announce new quarantine measures for these areas on Monday.

However, Mr. Tan said rising COVID-19 cases during the upcoming week may be negative for the market.

Timson Securities, Inc. Head of Online Trading and Trader Darren Blaine T. Pangan said the market’s next line of support may be at the 5,700 level.

“We may have to see if the psychological support at 6,000 holds. However, if the market moves higher, we’ll see if the index ends near the 6,400 resistance area,” Mr. Pangan said in a mobile phone message.

“The meeting between the US and China’s trade officials set to take place this weekend was postponed, and we’ll see how this may affect market sentiment on Monday,” he added.

The scheduled meeting between the two economic superpowers on Saturday was delayed due to conflicting schedules and the need for China to buy more US exports as part of their phase one trade deal signed earlier this year.

Meanwhile, online brokerage 2TradeAsia.com said in a market note placed the PSEi’s resistance between the 6,200 to 6,250 levels.

“Guidance might stem from the local central bank’s policy meeting and the national government’s next move on quarantine restrictions,” it said. — Revin Mikhael D. Ochave

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