Philippine stocks dropped Thursday on last-minute profit-taking while investors were waiting for the Bangko Sentral ng Pilipinas’ (BSP) policy decision.
The bellwether Philippine Stock Exchange index fell 12.05 points, or 0.18 percent, to close at 6,692.91, while the wider all-shares index shed 1.15 points, or 0.03 percent, to settle at 3,628.15.
Philstocks Financial Inc. research head Japhet Tantiangco said investors turned cautious ahead of the BSP’s policy meeting, which was scheduled after the market closed.
The BSP reduced the key rate by 25 basis point to 6.25 percent.
“Compelling factor for early cut centers on push to support growth after second quarter gross domestic product showed modest consumption and soft private investment,” said Metrobank chief economist Nicholas Mapa.
Mapa expects two more rate cuts to happen this year.
Sub-indices ended mixed, with services rising by 0.68 percent and property by 0.22 percent. Mining and oil dropped by 1.1 percent, financials by 0.77 percent and holding firms by 0.48 percent.
Value turnover reached P5.17 billion. Foreign investors were still net buyers, with total net inflow reaching P3.58 million.
Meanwhile, markets in Asia and Europe mostly mirrored positive strides on Wall Street Thursday, as easing US consumer inflation buoyed hopes that a big interest rate cut was around the corner, and as economic growth in Japan outpaced expectations.
The eagerly awaited US consumer price index (CPI) data showed a 2.9 percent rise last month from a year ago — its smallest 12-month increase since March 2021 — setting the stage for the Federal Reserve to start cutting interest rates.
Traders were optimistic that a cut at the September meeting could exceed the anticipated 25 basis points, with some observers eyeing as much as 50.
“The current buzz isn’t about whether the Fed will trim rates at its spotlight-stealing September 17-18 gathering but how deep they’ll dig into the cuts,” analyst Stephen Innes said in his Dark Side Of The Boom newsletter.
Positive growth figures from Japan meant the Nikkei 225 led the Asian surge, as the world’s fourth-largest economy reported a better-than-expected GDP rise of 0.8 percent for the second quarter.
The news came a day after Prime Minister Fumio Kishida said he would step down next month as his poll ratings tumbled ahead of next year’s elections due to price rises that have eaten into Japanese incomes, as well as a slew of scandals.
“Consumer sentiment should have improved because real wages have turned positive as promised wage increases start to get paid to workers,” Hiroyuki Ueno, chief strategist at SuMi Trust, said before the data’s release.
“In addition, the recovery in shipments by some automakers, some of which were suspended temporarily in May, will also have been a positive boost for consumer spending.”
News from China, meanwhile, was not as bullish, with industrial production slowing and unemployment rising in July. Consumer spending marginally beat analyst expectations.
The uninspiring data dampened slim hopes for the start of an economic revival in Asia’s biggest market.
“This snapshot of a once thriving economy underscores a persistent drag on domestic demand, not significantly alleviated by governmental initiatives aimed at boosting consumption and addressing imbalances in the recovery process,” Innes said.
“No amount of rate cutting seems to entice consumer spending if confidence in the economy or personal financial security is lacking.”
Despite the underwhelming news, Shanghai closed nearly a percent higher, while Hong Kong ended flat.
Seoul, Sydney and Singapore were all up, while Taipei, Jakarta and Bangkok ticked down.
European markets also began the day on a positive note, with London, Paris and Frankfurt all starting higher. With AFP
