Stocks recovered Wednesday from a two-day slump, after the Bangko Sentral ng Pilipinas announced that remittances from Filipinos working overseas grew to a record $32.54 billion last year.
The PSE index, the 30-company benchmark of the Philippine Stock Exchange, rose 30 points, or 0.45 percent, to close at 6,882.09 Wednesday, as four of the six subsectors advanced, led by property shares.
The broader all-share index picked up 4 points, or 0.12 percent, to settle at 3,636.18, on a value turnover of P5.26 billion. Losers outnumbered gainers, 113 to 71, while 46 issues were unchanged.
Five of the 10 most active stocks ended in the green, led by Universal Robina Corp. which climbed 4.54 percent to P147.40 and SM Prime Holdings Inc. which rose 2.70 percent to P38.00.
The peso, however, slipped 0.62 percent Wednesday to finish at 55.17 against the US dollar from 54.83 Tuesday. The local currency was still up 1.05 percent since the start of this year’s trading.
Meanwhile, other Asian markets sank Wednesday as a mixed US inflation report did little to soothe investor worries that the Federal Reserve will continue to ramp up interest rates, which many fear could cause a recession.
The much-anticipated figures from January’s consumer price index showed a slight slowdown from the previous month, but the 6.4 percent reading was higher than forecast, suggesting a return to normality will take longer than hoped.
A number of top Fed officials also lined up to restate that borrowing costs will likely need to go higher and for an extended period if they are to bring inflation down to their two percent target.
Recent data had suggested the bank’s almost year-long rate-hike campaign was beginning to show results, providing fuel for a healthy run-up in global markets in January as traders began factoring in a possible cut towards the end of 2023.
But that optimism has taken a severe hit, with a blockbuster jobs report confirming that the world’s top economy remains robust, narrowing the scope for the Fed to ease up.
After the figures were released, monetary policymakers reiterated their determination to stay the course, with expectations that rates could go well above five percent, from the current 4.5-4.75 percent.
Dallas Fed president Lorie Logan said: “We must remain prepared to continue rate increases for a longer period than previously anticipated, if such a path is necessary to respond to changes in the economic outlook or to offset any undesired easing in conditions.”
However, Philadelphia Fed chief Patrick Harker said he thought the bank was “likely close” to being restrictive enough.
Focus now turns to the release of US retail sales figures later Wednesday.
Wall Street ended mixed, having fluctuated after the data release.
But Asia sank back into the red.
Hong Kong led losses, shedding more than one percent, with China’s reopening from zero-Covid no longer able to provide any cushion to sentiment.
Shanghai, Tokyo, Singapore, Seoul, Sydney, Mumbai, Taipei, Bangkok and Jakarta were also well down.
The prospect of more rate hikes pushed the dollar even higher against its peers, having rallied Tuesday, while oil prices sank more than one percent as traders fretted over the impact on demand.
“While in line, the CPI release is a reminder that lowering inflation towards the Fed’s target may be more gradual than conventional thinking,” said SPI Asset Management’s Stephen Innes.
“And this environment may also result in a higher-for-longer rate environment — somewhat counter to a market still pricing in a Fed funds rate cut later this year.” With AFP
