The stock market rose slightly in thin trading Friday, as investors turned cautious pending the next move of the Bangko Sentral ng Pilipinas amid rising inflation.
The Philippine Stock Exchange Index gained 11.74 points, or 0.2 percent, to 7,399.61 on a value turnover of just P3.4 billion. Gainers edged losers, 96 to 93, with 51 issues unchanged.
Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr. said the central bank was considering a “strong follow-through” monetary action in the next meeting of the Monetary Board in August in the face of rising prices and excessive volatility in the foreign exchange market.
SM Prime Holdings Inc. of retail tycoon Henry Sy Sr. gained 1.2 percent to P37, while JG Summit Holdings Inc. of industrialist John Gokongwei climbed 1.9 percent to P54.
Megawide Construction Corp., which just completed the Mactan-Cebu International Airport, rallied 4.6 percent to P18, while Aboitiz Power Corp., a major power generator, advanced 2.1 percent to P37.15.
The rest of Asian markets advanced Friday, with Shanghai gaining two percent as China’s weak yuan currency defied US President Donald Trump’s criticism of a strong dollar and Fed rate hikes.
Trump, in part of an interview aired by US television network CNBC, broke with the long-established executive branch practice of not commenting on the Federal Reserve’s decisions out of respect for its independence.
“I’m not thrilled,” Trump told the network in an interview excerpt aired Thursday. “Because we go up and every time you go up they want to raise rates again.”
Trump also suggested that higher interest rates left the United States at a disadvantage compared to the European Union, China and Japan, allowing their currencies to weaken as the dollar strengthens.
The dollar index fell immediately after the remarks were broadcast and a stronger yen saw Tokyo shares edge down 0.3 percent on Friday.
Hong Kong gained 0.8 percent while Singapore and Sydney advanced 0.4 percent.
Fears are growing over a potential trade war, after Trump’s move to impose hefty import taxes on steel and aluminum from the EU, Canada and Mexico, in addition to levies on goods from China worth tens of billions of dollars, sparked retaliatory tariffs.
“Currency is now part of the trade war folks,” said Greg McKenna, chief market strategist at AxiTrader.
“And it is worth pondering whether this is a President who is going to break with 25-30 years of tradition in not interfering in Fed policy deliberations going forward.
“What I saw in that brief excerpt is a President who is going to drive his trade and tariff policy forward regardless of outside objections,” McKenna added.
But China’s yuan largely continued its steady decline against the dollar on Friday, providing Beijing with a buffer against the punitive tariffs, and Shanghai soared two percent by the end of the day.
The yuan bounced back slightly to around 6.79 to the dollar after falling below that earlier in the session. With AFP