The stock market’s performance this week is seen to largely hinge on signs indicating if the government will decide to ease or extend existing quarantine measures as the number of new COVID-19 cases seems to have eased but still remained high.

“Investors are expected to look towards the government’s decision with respect to the quarantine measures of the country after April 30, 2021,” said Philstocks Financial Senior Analyst Japhet Tantiangco.

He explained that, “A decision to extend the MECQ in the National Capital Region Plus, or hints that would point to such are seen to generate negative sentiment in the market.”

This is because the extension of the MECQ in the NCR Plus is seen to lead to more economic losses that will weigh on our recovery prospects,” Tantiangco said.

AAA Equities Head of Research Chris Mangun said “(This) week's events are going to be extremely important for the market as the government decides on what restrictions.”

He noted that, “We may see an extension of the current measures as the number of new cases has not shown any improvement. Further tightening of mobility will be a disaster for the economy as well as the market.”

Tantiangco added that, “Investors are also seen to monitor our COVID-19 situation. For this week so far, our case count has averaged 8,970 per day. If we see a significant decline from this, then it may fuel optimism in the market. However, a surge from the said daily average COVID-19 cases may lead to the opposite.”

Tantiangco noted that, “Investors are also expected to look towards the first quarter 2021 corporate earnings reports for clues on how companies are faring amid the lingering challenges brought by the COVID-19 pandemic.”

Online brokerage firm 2TradeAsia.com said that, “With about 8 percent of the index basket that will report first quarter earnings (this) week, expect gyrations as the market digests these data.”

“Pending stronger impetus on the vaccine front, expect funds to follow sector headlines; for instance, power giants AP and MER will report first quarter earnings, coinciding with historically peak power demand during the summer season,” it added.

Meanwhile, Tantiangco warned that, “A Death Cross (crossing of the 50-day exponential moving average below the 200-day EMA) has already appeared on the PSEi’s chart last April 22, 2021 indicating a possible downtrend ahead.”

In the last five appearances of the Death Cross in the PSEi’s chart prior to this one, the local market has declined by an average of 17.1 percent from the appearance of the Death Cross to the lowest point reached before recovering.

In addition, 2TradeAsia.com said investors will also be looking if there will policy adjustments this week as the widely followed US Federal will convene for a statement on April 29.

“How it will resound with Bangko Sentral ng Pilipinas policy will be interesting to follow, in light of improving inflation and jobless data,” it added.

Meanwhile, Abacus Securities Corporation noted that, trading volumes may dry up further as investors prepare for the massive P72.45 billion Monde Nissin Corporation initial public offering.

For stock picks, COL Financial has a BUY rating on Vista Land “as we expected them to continue capitalizing on the current demand trends for horizontal projects.”

“We also like VLL for the resiliency of its leasing revenues during the pandemic,” it added.

Abacus believes that the worst is over for the banking sector, but “it is still travelling through a pot-hole ridden road that seems to have lengthened.”

“For our top picks, we believe those road hazards are already priced in,” it adding noting that it favors BDO Unibank, Metrobank, and East West Bank.