The stock market rose Tuesday after the release of government data showing a decent economic growth rate of 7.4 percent in the second quarter of the year.
The Philippine Stock Exchange Index added 34.73 points, or 0.5 percent, to 6,468.97 on a value turnover of P12.2 billion. Gainers beat losers, 112 to 82, with 42 issues unchanged.
Gross domestic product rose 7.4 percent, slightly weaker than the 7.5 percent expected and down from 8.2 percent in the previous three months, Economic Planning Secretary Arsenio Balisacan told reporters.
SM Investments Corp. of the Sy Group climbed 3.5 percent to P805, while unit SM Prime Holdings Inc. gained 1.9 percent at P37.30.
Major property developer Ayala Land Inc. of the Ayala Group advanced 4.6 percent to P26.35, but International Container Terminal Services Inc. of business tycoon Enrique Razon Jr., the biggest port operator, fell 1.6 percent to P181.
Most Asian markets, meanwhile, rose Tuesday but investors moved cautiously ahead of US inflation data later in the week, after a jobs report suggested the Federal Reserve would likely need to continue its sharp interest rate hikes to tame runaway prices.
A rally across global markets from June lows appeared to have hit the buffers after Friday’s forecast-busting employment reading showed the world’s top economy remained resilient but meant more monetary tightening was on the cards.
Asian equities fluctuated in the morning but improved as the day progressed.
Shanghai, Sydney, Seoul, Wellington, Taipei, Bangkok and Jakarta were in positive territory but Tokyo fell.
Hong Kong reversed a morning rally led by developers after the government denied claims it was considering removing an extra stamp duty for mainland Chinese buying property in the city.
There had been a hope that recent weak data—including one showing the US economy contracted for two straight quarters—would allow the bank to take its foot off the pedal in lifting borrowing costs, and possibly begin cutting in 2023.
Now, investors are on edge ahead of Wednesday’s figures, with some observers warning that an above-estimate reading on inflation, which is already at a four-decade high, could spur another sharp market sell-off.
There is a growing expectation that central bank interest rate hikes will go too far and tip the global economy into recession.
Saira Malik, at investment manager Nuveen, told Bloomberg Television the losses could kick in when investors realize “the Fed is not going to pivot on interest-rate hikes in early 2023, inflation should remain pretty persistent and rate hikes should continue.”
Wall Street provided a glum lead as tech firms took a hit following a disappointing earnings report from chip giant Nvidia caused by lower-than-expected gaming income, which was seen as a warning that the end of the downturn was still some way off.
“While it’s tempting to buy into the narrative that we’ve seen the lows of the year, none of the price action thus far serves to support that conclusion,” said CMC Markets analyst Michael Hewson.
“Nvidia’s profit warning merely serves to underline the challenges facing, not only the tech sector, but the wider global economy.” With AFP
