Stocks extended their gains Thursday after data suggesting that US inflation may be stabilizing provided some fresh cheer.
The Philippine Stock Exchange Index increased 92.62 points, or 1.3 percent, at 7,307.75 on a value turnover of P7.2 billion. Gainers beat losers, 131 to 60, with 50 issues unchanged.
AC Energy Corp. of the Ayala Group surged 5.8 percent to P9.52, while noodles maker Monde Nissin Corp. advanced 4.3 percent to P16.58.
Jollibee Foods Corp., the biggest fast-food chain, rose 3.3 percent to P230.60, while Metropolitan Bank & Trust Co., the second-largest lender in terms of assets, climbed 2.6 percent to P59.20.
The rest of Asian stock markets were mixed Thursday as traders fought to maintain the previous day’s upward momentum.
The US Labor Department said consumer prices rose seven percent on-year in December, the fastest rate since 1982, as supply snarls and energy costs were compounded by surging demand from Americans returning to normal life.
However, the reading was in line with expectations and analysts pointed out that the increase from the previous month had slowed and was below forecasts, indicating that the rally may have peaked or was close to topping out.
Producer price figures later in the day will be closely followed for further clues.
US investors welcomed the news, with all three main indexes extending Tuesday’s gains that were fanned by Federal Reserve boss Jerome Powell pledging to rein in prices but do his utmost to nurture the economic recovery.
After Wednesday’s rally, Asian equity markets fluctuated. Hong Kong, Sydney, Wellington, Taipei and Jakarta rose, while Singapore, Bangkok and Mumbai were flat.
Tokyo ended down one percent as a stronger yen weighed on exporters, with Shanghai and Seoul also off.
Markets had endured a torrid start to the year, particularly after Fed minutes last week showed a much more hawkish tilt by policymakers that many feared could see the bank remove financial support too quickly.
But Powell’s remarks and the latest data have soothed nerves considerably this week.
Still, there remains much debate on how many times the bank will hike interest rates and when it will begin to cut back on the vast bond holdings it has which have helped keep borrowing costs in check.
Jack Janasiewicz, at Natixis Investment Managers Solutions, wrote: “March has all but made a rate by the Fed a foregone conclusion. June is not far behind either.
“But combine this with base effects (comparing with last year’s high readings), COVID-related improvements in supply chains and labour markets, the Fed’s tough talk on inflation, balance sheet management and some modest fiscal tightening and we very well could see inflation prints beginning to soften to a pace that some are not expecting.”
He added: “There’s a lot of hawkishness baked in at current levels. Maybe too much.”
But while the mood has improved on trading floors, there remain concerns that markets will not have an easy ride this year as the Fed removes the massive support that has helped drive a two-year rally and saw the economy through the pandemic. With AFP