Share prices edged higher Friday to sustain Thursday’s rally after the closely watched US consumer prices index eased more than expected in July.
The Philippine Stock Exchange Index added 18.98 points, or 0.3 percent, to 6,699.66 on a value turnover of P13.8 billion. Gainers beat losers, 119 to 77, with 46 issues unchanged.
Puregold Price Club Inc. of the retail tycoon Lucio Co climbed 3.1 percent to P34.90, while BDO Unibank Inc. of the Sy Group, the biggest lender in terms of assets, advanced 2.1 percent to P118.30.
Metropolitan & Trust Co. of the Ty Group, the second-largest bank, rose 2 percent to P51.90., but fiber broadband provider Converge ICT Solutions Inc. fell 8.4 percent to P19.18.
The rest of Asian markets were mixed Friday, with traders struggling to build on the previous day’s rally as they come to terms with the likelihood that central banks will continue to raise interest rates to battle runaway inflation.
Equities surged across the region Thursday on hopes the Federal Reserve could slow down its pace of monetary tightening.
After starting out brightly, Wall Street ended broadly negative with the Nasdaq leading losses.
Tokyo jumped more than two percent as investors there returned from a one-day break to play catch-up with Thursday’s bounce.
There were also gains in Hong Kong, Seoul, Mumbai and Taipei but Shanghai, Sydney, Singapore, Jakarta and Wellington fell.
A similarly upbeat report on the producer price index, which can act as a guide to future CPI readings, provided further reason for optimism.
However, the feel-good vibe wore off in US trading after Fed officials lined up to warn that there was a long way to go before inflation, which is still sitting around four-decade highs, is tamed.
San Francisco Fed chief Mary Daly was the latest to bring markets down to earth, telling Bloomberg TV that the data were “significant in that they are saying that we’re seeing some improvement but they’re not victory.”
She added she would likely support a half-point hike at next month’s meeting, but was open to a third successive three-quarter-point lift if the data showed it was needed.
Daly also tempered hopes that the bank could begin cutting borrowing costs next year if prices are brought down, and said they would be held for a period before any reductions are made.
“I don’t see this hump-shaped part where we raise interest rates to really high rates and then bring them down,” she said.
“I think of raising them to a level that we know is going to be appropriate and then holding them there for a while so that we continue to bring inflation down until we’re well and truly done.”
Her comments follow similar warnings by two colleagues on Wednesday.
The yield on 10-year US Treasury notes rose Thursday, reflecting expectations the Fed will press on with its sharp rate increases.
London rose at the open even as data showed the UK economy contracted in the second quarter, with expectations it will plunge into a year-long recession by the end of the year owing to a cost-of-living crisis with inflation at its highest level in decades.
