Share prices slipped Thursday on profit taking ahead of the release of the US inflation data that could have a huge bearing on the Federal Reserve’s rate hike plans.
The Philippine Stock Exchange Index fell 69.86 points, or 0.9 percent, to 7,432.62 on a value turnover of P10.5 billion. Losers edged gainers, 101 to 97, with 55 issues unchanged.
Globe Telecom Inc. of the Ayala Group, the second-biggest telecommunications firm, sank 7.1 percent to P2,818, while sister unit AC Energy Corp. dropped 3.4 percent to P8.84.
Solar Philippine Nueva Ecija Corp., which is building the largest solar farm in Southeast Asia, declined 3.4 percent to P2.02 but Emperador Inc. of tycoon Andrew Tan, the biggest liquor maker, rose 3.2 percent to P24.
The rest of Asian stocks enjoyed further gains Thursday as traders jostled for position ahead of the release of US inflation data.
Asia battled to maintain the momentum and fluctuated through the day but gainers came out on top.
Tokyo, Hong Kong, Shanghai, Seoul, Taipei, Mumbai and Bangkok were solidly higher and Singapore eked out small gains. Wellington and Jakarta edged down.
A broadly positive week for global equities continued on Wednesday thanks to some healthy earnings results, the further reopening of economies and signs of an easing in Russia-Ukraine tensions.
While the mood for now is positive, nerves are on edge as the US consumer price index figures come up for release.
Commentators warn that a reading above the forecast 7.2 percent—which would be a new four-decade high—would pressure the Fed to act more aggressively to rein in prices.
Some Fed officials on Wednesday said policymakers would make their decisions based on data coming across their desks, with a 50-basis-point hike—as opposed to the usual 25 basis points—was not off the table just yet.
Surging inflation and bets that the US central bank will end its pandemic-era cheap cash policies have weighed on world markets in recent months, stalling a two-year rally that saw them hit record or multi-year highs.
But there is a feeling in some quarters that investors may be getting used to the prospect of higher borrowing costs, while still-strong economic data and the easing of containment measures will continue to support company earnings.
“While uncertainty remains as to the course of inflation, particularly wages, and interest rates in the months ahead given the planned tightening by the Fed is essentially new ground… historically economies have grown in much higher interest rate environments,” said markets strategist Louis Navellier. With AFP
“Why is the market rallying when we’re about to get hit with that horrible inflation news tomorrow? In a word: earnings. They’re much better than anyone anticipated. So the surprises are huge and the guidance, by and large, is great.”
All three main indexes on Wall Street chalked up strong gains Wednesday.
There is a general consensus that the outlook for the global economy is positive and markets will recover as inflation is brought under control thanks to easing supply snarls, but some observers remain cautious. With AFP