Share prices inched higher Tuesday on select bargain hunting and declining COVID-19 cases, ignoring the plunge in most of Asian stock markets.
The Philippine Stock Exchange Index added 35.57 points, or 0.5 percent, to 7,288.21 on a value turnover of P6.3 billion. Losers, however, edged gainers, 96 to 82, with 52 issues unchanged.
Solar Philippines Nueva Ecija Corp., which is building what is being touted as the biggest solar farm in Southeast Asia, rose 3.1 percent to P2.02, while SM Prime Holdings Inc. of the Sy Group climbed 1.9 percent to P35.05.
Converge ICT Solutions Inc., a fiber broadband provider, increased 1.3 percent to P31, but Metropolitan Bank & Trust Co., the second-largest lender in terms of assets, fell 1.3 percent to P56.25.
Asian markets plunged Tuesday following a highly volatile day on Wall Street fueled by fears about the Federal Reserve’s plans to hike interest rates, with attention lasered on its upcoming two-day policy meeting.
Asia spent all Tuesday well in the red with Tokyo down 1.7 percent as Hong Kong shed 1.7 percent, while Singapore, Taipei and Jakarta were also off more than one percent.
Sydney shed 2.5 percent after higher-than-forecast Australian core inflation figures ramped up bets on a rate hike by the country’s central bank.
Shanghai and Seoul fell more than two percent, with Wellington, Mumbai and Bangkok also down.
A disappointing start to the corporate earnings season, as well as growing concern about Russia’s troop build-up on Ukraine’s border and warnings of a possible invasion were also dragging on sentiment.
After spending much of last year playing down the spike in prices, the US central bank has in recent months taken a sharp hawkish turn on monetary policy as officials look to bring inflation—which is at a four-decade high—under control.
Minutes from the most recent meeting indicate it will begin lifting interest rates from March with three or possibly four more hikes before the end of the year. On top of that, it plans to start offloading its vast bond holdings.
But while the move to battle runaway prices is seen as crucial, the end of the era of ultra-cheap cash for investors has rattled markets after almost two years of uninterrupted gains to record or multi-month highs.
All attention is on the Fed gathering that starts later in the day, with investors poring over every word from the bank’s statement and boss Jerome Powell’s subsequent news conference.
“The Fed is scrambling to control inflation and markets have gone from expecting a gradual interest rate hiking cycle to an accelerated tightening action until inflation eases,” said OANDA’s Edward Moya.
“Some economists think the Fed needs a half-point rate increase in March to show they are serious about tackling inflation and signal that more are coming.”
He added that officials need to “send a message they are tackling inflation, but they don’t need to overcommit themselves. The Fed’s best option is to signal they will raise rates by 25 basis points in March and signal another one is coming in May. Inflation may show its peak around then and they may not need to be as aggressive going forward.” With AFP