Philippine stocks traded higher Monday, pushing the benchmark index near the 7,000 level on strong buying from domestic from local and overseas investors.
The 30-company Philippine Stock Exchange index (PSEi) surged 48.16 points, or 0.69 percent, to close at 6,984.25, while the broader all-shares Index jumped 25.19 points, or 0.67 percent, to reach 3,778.05.
The PSEi finished higher despite the downtrend in Asian markets over concerns about the US economy and losses in technology stocks.
The Philippine peso, however, tumbled to 56.52 against the US dollar, after climbing to 55.90 on Friday.
Regina Capital Development Corp head of sales Luis Limlingan said investors continued to buy into the local market with many expecting foreign funds flow on the back of strong economic data in the country versus the rest of the region.
“For this week, the key economic data releases that investors will be eying include the CPI report on Wednesday and the University of Michigan consumer sentiment report,” Limlingan said.
Investors await the release of balance of payment and June foreign direct investments data.
Value turnover reached P6.76 billion. Four of the six sectoral indices ended higher. Financials rose 1.36 percent, while property climbed 1.17 percent and holding firms by 1.06 percent. Services went up by 0.36 percent.
Mining and oil dropped 0.83 percent, while industrial declined by 0.08 percent.
Meanwhile, Asian markets retreated Monday after another batch of worse-than-expected US jobs data revived fears of a possible recession in the world’s top economy.
The big miss in the August non-farm payrolls reading was compounded by heavily revised-down figures for the previous two months and ramped-up bets on a Federal Reserve interest rate cut next week.
A disappointing revenue forecast from chipmaker Broadcom added to the negative sentiment, dealing another blow to a tech sector already under pressure over concerns a rally this year may have been overdone.
The highly anticipated report Friday showed an estimated 142,000 jobs were created in the United States last month, up on July but well off forecasts.
Traders have been on edge since the July figures, which helped spark a market rut on speculation that the Fed may have waited too long to cut borrowing costs as it focused on bringing inflation down.
After last month’s result, some analysts pointed to the “Sahm Rule,” which says an economy is in the early stages of recession if the three-month moving average of unemployment is 0.5 percentage points above its low over the previous 12 months.
Wall Street’s three main indexes tumbled Friday on the latest news and pushed the dollar down against its main peers.
With the central bank set to decide next week, debate is centered on whether it will reduce rates by 25 or 50 basis points.
“The report didn’t suggest a severe downturn is imminent, but the softness in the numbers certainly point to an increase in the probability a recession could be on the cards,” said National Australia Bank’s Rodrigo Catril.
“The Fed may just cut by 25 basis points in September, but it will keep its options open for bigger cuts in November and or December, depending on how the data evolves from here.”
After the payrolls report was released, Fed governor Christopher Waller said he was open minded about how big a cut to make but that officials needed to act.
“The current batch of data no longer requires patience, it requires action,” he warned, while adding that he did not think the economy was in recession or headed for one.
Meanwhile, Chicago Fed boss Austan Goolsbee told CNBC: “It raises some serious questions, not just about this meeting, but over the next several months.
“How do we make an effort to not have things turn into something worse.”
In Asian trade, Tokyo, Hong Kong, Shanghai, Sydney, Seoul, Taipei and Jakarta all fell, though there were gains in Mumbai, Singapore and Bangkok.
Tech firms again took a hit following heavy losses in their US peers, though bargain-buying helped them pare the morning’s bigger falls.
Advantest and Tokyo Electron retreated in Tokyo, while Taipei listed chip titan TSMC dived more than two percent, with Samsung down a similar amount in Seoul.
A slight uptick in Chinese inflation did little to soothe worries about the world’s number two economy, with the reading at a six-month high but missing forecasts.
London, Paris and Frankfurt were also in the green.
Oil prices clawed back some of Friday’s big losses sparked by demand concerns as the US outlook weakened.
The commodity was supported by news that OPEC and other key producers had delayed a planned output boost. With AFP
