Stocks rose Tuesday on mild bargain hunting but traders were digesting growth concerns in China and rising interest rates in the United States.
The Philippine Stock Exchange Index added 41.63 points, or 0.6 percent, to 7,037.74 on a value turnover of P5.2 billion. Gainers beat losers, 102 to 83, with 46 issues unchanged.
Nickel Asia Corp., the biggest nickel miner, advanced 5.4 percent to P8.17, while Globe Telecom Inc., the second-largest telecommunications firm, climbed 2 percent to P2,472.
Fiber broadband provider Converge ICT Solutions Inc. gained 1.5 percent at P30.60, but newly-listed CTS Global Euqity Group Inc. sank 9.3 percent to P0.98.
Hong Kong stocks, meanwhile, dropped sharply while Japan edged higher on the back of a plummeting yen.
Chinese growth numbers for the first quarter of 2022 exceeded expectations on Monday but the government warned of “significant challenges” ahead with key economic hubs in the throes of COVID-19 lockdowns.
Millions of residents are still cloistered in their homes in economic center Shanghai with restrictions—which have also hit tech hub Shenzhen and the northeastern grain basket of Jilin—shutting supply lines.
Investors were left weighing whether attempts to lift the economy by Chinese policymakers—who have held off cutting interest rates—would offset Beijing’s zero-COVID policies.
“The focus in Asia is on mainland policy easing to cushion the impact of lockdowns,” Stephen Innes at SPI Asset Management said, adding that while first-quarter growth was marginally better than predicted, “there was no positive follow-through in China-sensitive assets.”
“Reopening cities is the only fix to drive credit growth, which could translate into a sustainable economic rebound that supports equity markets and a load of other China proxy assets,” he said.
Japan’s Nikkei 225 made healthy gains, with South Korea, Taiwan, India, and Australia all edging upward.
But Hong Kong plummeted by its largest margin in three weeks after a four-day holiday hiatus.
The Hang Seng Index shed more than 2.7 percent before recovering slightly to around 2.4 percent down, with the Shanghai Composite Index also slipping.
The impact of monetary policy tightening in the United States to combat inflation was another variable watched closely by investors, with major European markets in London, Paris, and Frankfurt resuming trade after a lengthy holiday break in the red on Tuesday.
Based on inflation concerns, pandemic lockdowns in China, and the war in Ukraine, the World Bank last week downgraded its forecast for global growth this year, and the IMF is expected to do the same when it releases its updated forecasts on Tuesday.
“Its current estimate for 2022 is 4.4 percent which it set in January, with Europe and Central Asia likely to take the brunt, due to the Russian war in Ukraine, and COVID restrictions, respectively,” said Michael Hewson, chief market analyst at CMC Markets UK.
“With the return of European markets from the long Easter weekend break we look set to get off to a negative start in the wake of yesterday’s lower finish for US markets, amid concerns that the growth downgrades seen yesterday could well be the first of many.” With AFP