Stocks rose Tuesday on bargain-buying, following Monday’s slump amid worries over another big Federal Reserve interest rate hike.
The PSEi, the 30-company benchmark index of the Philippine Stock Exchange, gained 14 points, or 0.2 percent, to close at 5,847.37, as three of the six subsectors advanced.
The broader all-share index also picked up 3 points, or 0.1 percent, to settle at 3,152.44, on a value turnover of P4.2 billion. Losers outnumbered gainers, 93 to 84, while 42 issues were unchanged.
Six of the 10 most active stocks ended in the green, led by BDO Unibank Inc. which went up 3.3 percent to P114.80 and Globe Telecom Inc. which added 2.8 percent to close at P2,230.00.
Meanwhile, most markets fluctuated in Asian trade Tuesday as investors grow increasingly fearful that more big interest rate hikes will tip economies into deep recessions, with the mood also darkened by the worsening Ukraine war and worries over China’s outlook.
With the focus on inflation, analysts said consumer price index data released later this week will be crucial to the direction of risk assets—another big reading could spark a fresh equity selloff and surge in the dollar.
Investors had hoped that a series of bumper rate increases by the US Federal Reserve this year would begin to drag on the economy and slow runaway prices, allowing policymakers to slow down their pace of monetary tightening.
But a forecast-beating jobs report on Friday highlighted the tough work the central bank has in bringing inflation down from four-decade highs, and many observers warn a recession is virtually inevitable.
World Bank chief David Malpass said there was a “real danger” of a global contraction next year, adding that the surge in the dollar was weakening the developing nations’ currencies and pushing their debt to “burdensome” levels.
And JP Morgan boss Jamie Dimon told CNBC that while the US economy was holding up now, it faced several headwinds including rising rates, surging inflation, Fed tightening and the Ukraine war.
He added that he saw a US recession in six to nine months, and that the S&P 500 could fall another 20 percent.
Barings strategist Christopher Smart said: “It’s little wonder investors enter the week in a dreary mood, especially with headlines from Ukraine signalling a further escalation in geopolitical tensions.
“Of course, markets are meant to look ahead, but it’s hard not to see the next few quarters bringing more of the same.”
After another round of losses in New York, Asia again struggled.
Chip manufacturers globally took a pounding from new US export controls aimed at restricting China’s ability to buy and make high-end chips with military applications.
The Philadelphia Stock Exchange Semiconductor Index saw its lowest close since late 2020, while Bloomberg News reported that $240 billion had been slashed from companies’ market values worldwide.
Taipei led the losses in Asia—diving more than four percent—as chip giant TSMC plunged 8.3 percent, while a hefty selloff in Samsung Electronics dragged Seoul down 1.6 percent. Tokyo was also sharply lower owing to a hit to tech firms.
All three markets had been closed Monday and were reacting to Friday’s US announcement for the first time.
Hong Kong fell below 17,000 points for the first time since late 2011, while Sydney, Mumbai, Bangkok and Jakarta were also lower.
Shanghai, Singapore and Wellington edged up slightly on bargain-buying.
London, Paris and Frankfurt also fell at the open.
“There is growing pessimism in the markets now and with some big data points to come from the US this week, not to mention the start of earnings season… investors should probably brace for more volatility ahead,” said OANDA’s Craig Erlam. With AFP