Stocks rebounded Tuesday ahead of the release of first-quarter gross domestic product growth later this week.
The PSE index, the 30-company benchmark of the Philippine Stock Exchange, gained 21 points, or 0.33 percent, to close at 6,622.61, as four of the six subsectors advances, with property leading the way.
The index representing all shares also picked up 6 points, or 0.19 percent, to settle at 3,532.33 on a value turnover of P4.18 billion. Losers outnumbered gainers, 86 to 73, while 71 issues were unchanged.
Six of the 10 most active stocks ended in the green, led by SM Prime Holdings Inc. which climed 2.10 percent to P34.00 and Universal Robina Corp. which rose 2.06 percent to P153.90.
Meanwhile, the peso retreated to 55.76 against the US dollar Tuesday from 55.25 following reports that the country’s trade deficit widened to $14.57 billion in the first quarter amid sluggish exports.
Asian markets struggled Tuesday as investors eyed the release of US inflation data later in the week, while mixed Chinese trade data suggested that recovery in the world’s number two economy was still taking time.
While the region enjoyed a healthy start to the week, there remains plenty of nervousness on trading floors after last week’s upheaval in the US banking sector, which hammered financial stocks.
The turmoil saw the sale of the embattled First Republic Bank to JPMorgan Chase and came just two months after the collapse of three other regional banks and the takeover of Swiss giant Credit Suisse by rival UBS.
Still, while a much-anticipated Federal Reserve survey of banks showed tighter lending standards in the first few months of the year, which they see lasting through 2023, analysts said the reading was not as bad as feared.
Asked about their outlook for lending standards over the rest of 2023, “banks reported expecting to tighten standards across all loan categories”, the central bank reported.
National Australia Bank’s Rodrigo Catril said: “The survey revealed a modest deterioration in lending standards to business at a rate that was slightly higher than in January.
“But, after concerns over the health of US regional banks, the good news is that the survey did not [yet] reveal evidence of a major credit crunch.”
Focus is now on Wednesday’s consumer price index report for April and the following day’s wholesale prices data.
A drop in the inflation reading in recent months has fanned hopes that the Fed will soon pause its tightening campaign and even begin cutting by the end of the year, with the banking crisis reinforcing that view.
After lifting borrowing costs last week, officials hinted at a possible hold at their June meeting.
After a largely flat Monday on Wall Street, Asia was mostly in the red.
Hong Kong and Shanghai sank as Chinese data showed April exports rising more than expected but slowing from March, while imports plunged far more than expected.
The readings suggested the economic recovery was taking much longer to kick in, even after officials lifted strict zero-Covid measures at the end of last year.
“There is no way to sugarcoat this one, as it’s a colossal miss of epic proportions” on the imports reading, said SPI Asset management’s Stephen Innes
“Hence the clear read-through is to expect weaker [Chinese] inflation numbers on Thursday as domestic demand remains exceptionally fragmented. And this begs the question, where is the [central bank] support?” with AFP
