Stocks fell Thursday ahead of the Bangko Sentral ng Pilipinas’ decision to raise the key interest rate by another 50 basis points that brought it to a 14-year high of 6 percent.
The PSE index, the 30-company benchmark of the Philippine Stock Exchange, lost 6 points, or 0.09 percent, to close at 6,815.91, as three of the six subsectors declined, led by mining and oil.
The broader all-share index went up 2 points, or 0.08 percent, to settle at 3,639.08, on a value turnover of P12.23 billion. Losers outmatched gainers, 102 to 80, while 54 issues closed flat.
Two of the 10 most active stocks ended in the green, with JG Summit Holdings Inc. rising 2.37 percent to P54.00 and Ayala Land Inc. picking up 1.89 percent to finish at P29.60.
Meanwhile, the peso slightly appreciated Thursday to close at 55.12 against the US dollar from 55.17 Wednesday.
Other Asian markets rose Thursday, extending gains in New York, as a forecast-busting US retail sales report showed American consumers remained confident despite elevated inflation and the prospect of more interest rate hikes.
Traders have been tracking US data for months, with the general consensus being that, while good for the economy, a strong reading is bad for stocks as it adds pressure on the Federal Reserve to keep tightening monetary policy.
With this in mind, a massive half-a-million jump in new jobs last month was the spark for a sell-off across the world, and a prompt for central bank officials to warn rate hikes would need to go higher than expected and stay there longer.
News this week of a smaller-than-estimated drop in January inflation reinforced that view, further denting investor sentiment.
However, analysts said Wednesday’s jump in retail sales—the biggest since March 2021—may have led some to change their minds from the “good news is bad news” mantra, and that the economy could avoid a “hard landing”, or recession.
Quincy Krosby, of LPL Financial, told Bloomberg Television that the gains were “telling us maybe we can keep going as long as inflation is coming down overall and growth is solid.”
National Australia Bank’s Rodrigo Catril added: “Strength in retail sales figures have been supported by a strong labor market… and as noted by the New York Consumer survey earlier in the week, the US consumer is not worried about losing their job.”
“The main takeaway is that the US consumer remains in rude health and with inflation still too high for comfort, the Fed has no alternative but to keep lifting the funds rate,” he said.
All three main indexes on Wall Street initially sank on the latest figures before rebounding to end the day in the green.
And after a rocky week so far, Asia picked up the baton.
Hong Kong, Tokyo, Sydney, Seoul, Singapore, Mumbai, Bangkok, Wellington and Taipei were all well up, though Shanghai and Jakarta reversed earlier gains. With AFP