Stocks extended their gains Wednesday, taking their cue on a positive performance on Wall Street as traders prepared for the release of highly anticipated US inflation data.
The Philippine Stock Exchange Index added 44.25 points, or 0.6 percent, to 7,502.48 on a value turnover of P8.4 billion. Gainers beat losers, 112 to 89, with 58 issues unchanged.
Noodles maker Monde Nissin Corp. rose 3.3 percent to P16.26, while major property developer Ayala Land Inc. of the Ayala Group climbed 2.8 percent to P37.85.
PLDT Inc., the biggest telecommunications firm, advanced 2.6 percent to P1,934, while International Container Terminal Services Inc., the largest port operator and owned by tycoon Enrique Razon Jr., gained 2.3 percent at P221.
The rest of Asian equity markets rose Wednesday, while sentiment was buoyed by signs of easing Russia-Ukraine tensions.
Oil prices also enjoyed a small bounce on demand optimism after two days of losses fueled by the positive vibes from Eastern Europe and as talks on an Iran nuclear deal appear to be progressing.
With speculation swirling over the Federal Reserve’s plans to battle soaring prices, global equities have fluctuated wildly at the start of the year as traders try to position themselves for a series of interest rate hikes that are likely to begin in March.
The prospect of the removal of cheap cash—which has pushed markets to record or multi-year highs—has particularly hit tech firms as they are more susceptible to higher rates.
However, the sector helped New York’s three main indexes to healthy gains on Tuesday, and Asia followed suit in early trade Wednesday.
Hong Kong led the way, jumping more than two percent thanks to a 6.8-percent surge in market heavyweight Alibaba after Japan’s SoftBank allayed fears it was planning to offload some of its huge holdings in the e-commerce giant.
Alibaba had taken a hit earlier on speculation about the share sale, which compounded the Chinese firm’s woes after suffering hefty losses owing to Beijing’s crackdown on the tech sector.
Tokyo, Sydney, Taipei and Bangkok were all up more than one percent, while Shanghai, Seoul, Singapore, Wellington, Mumbai and Jakarta also rallied.
Still, investors remain nervous and Thursday’s US January inflation print is front and center this week.
Forecasts are for another pop up from the four-decade-high seven percent seen in December, while a big miss in either direction could have big consequences for markets.
A higher reading will pile pressure on the Fed to embark on a more aggressive tightening campaign but a weaker figure would temper worries.
“The inflation data has continued to rise faster than many anticipated and we’re now in a situation where central banks are racing to catch up and get to grips with price pressures,” said OANDA’s Craig Erlam.
“Many still expect we’ll see an orderly return to inflation targets over the forecast horizon with moderate rate increases but the risk of inaction becomes far greater than the alternative.” With AFP