Stocks rose Wednesday on bargain hunting and a government report showing the inflation rate in December eased to a one-year low of 3.6 percent from 4.2 percent a month ago.
The Philippine Stock Exchange Index added 50.13 points, or 0.7 percent, to 7,091.40 on a value turnover of P6.9 billion. Losers, however, beat gainers, 108 to 86, with 50 issues unchanged. Trading resumed after being cancelled Tuesday owing to a technical glitch.
The Philippine Statistics Authority said Wednesday the inflation rate dropped on slower annual increases in the prices of food and non-alcoholic beverages.
PLDT Inc., the biggest telecommunications firm, advanced 4 percent to P1,885, while SM Prime Holdings Inc. of the Sy Group climbed 2.5 percent to P34.35.
Solar Philippine Nueva Ecija Corp., however, fell 6.9 percent to P1.21, while AC Energy Corp. of the Ayala Group declined 3.8 percent to P10.10.
The rest of Asian markets struggled in Asia on Wednesday following a tepid lead from Wall Street, with inflation and expected interest rate hikes returning to the key focus of concerns as Omicron fears fade for now.
Chinese technology firms, which have also been hit by a crackdown from the government, were a big drag on Hong Kong as it sank more than one percent. Concerns about a new outbreak of COVID in the city that has led to the reimposition of containment measures added to the glum mood.
Shanghai, Sydney, Singapore, Seoul, Taipei and Jakarta also fell.
Tokyo, Wellington, Taipei and Jakarta rose. Tokyo was flat with the yen holding losses at a four-year low against the dollar.
While the new COVID variant continues to spread rapidly around the world, forcing governments to maintain containment measures, its apparently milder symptoms have allowed traders to focus more on future economic policies and plans to rein in surging prices.
Later Wednesday sees the release of minutes from the Federal Reserve’s December rate meeting, which dealers hope will provide a clearer idea about officials’ policy plans.
That is followed by Friday’s jobs data for last month that could play a key role in their next deliberations.
With the bank due to end its vast bond-buying stimulus program by March, commentators are debating when and how many times the Fed will hike borrowing costs as it tries to overcome inflation running at a pace not seen in decades.
“One of the more dovish Fed members, Neil Kashkari, said he supports two rate increases this year, which might mean pricing in three rate hikes this year might not be enough,” said OANDA’s Edward Moya.
And Steve Englander, at Standard Chartered, added: “Earlier we thought that rate hikes wouldn’t be on the table until mid-2022 but the Fed seems to have worked up a consensus to taper faster and hike sooner rather than later.”
Still, he remained upbeat about the outlook for markets, saying: “But we don’t think inflation dynamics will support continued hiking.
“We suspect the biggest driver of asset markets will be when inflation and COVID fears begin to ebb.”
After ringing up new record highs on Monday, the S&P 500 fell on Wall Street, while the Nasdaq sank more than one percent as tech firms—which generally rely on debt and low rates to fuel growth—took a hit.
However, the Dow edged to a new all-time high. With AFP