Stocks fell for a third day, as traders turn their attention to the Federal Reserve’s next policy meeting and China’s struggling economy.
The 30-company Philippine Stock Exchange index shed 46 points, or 0.72 percent, to close at 6,430.58 as three of the six subsectors retreated. It was also down 2.07 percent since the start of the year.
The heavier index representing all shares also fell 14 points, or 0.42 percent, to settle at 3,443.85, on a value turnover of P5.41 billion. Losers outnumbered gainers 105 to 78, while 50 shares were unchanged.
Only three of the 10 most active stocks ended in the green, led by International Container Terminal Services Inc. which climbed 3.08 percent to P201.00. PLDT Inc. rose 0.75 percent to P1,209.00 while BDO Unibank Inc. went up 0.74 percent to P137.00.
Analysts expect the stock market to rebound in the second half. Mark Canizares, head of equities at Manulife Investment Management and Trust Corp. said the moderating inflation would provide support to local share prices going into the second half of the year.
“Rate-sensitive sectors such as residential property will likely benefit from this tailwind. Domestic consumption, which benefitted as the country re-opened, will likely get some support as well from easing prices, as raw material and other input costs moderate,” he said.
“Should the trend of deceleration continue in the second half, the local market’s focus will likely shift to when interest rates will peak and eventually decline. Lower rates historically help drive a rally in equity markets,” said Canizares.
Most Asian markets traded lower Thursday. After weeks of brinkmanship, Democrats and Republicans came together to push through an agreement to lift the debt ceiling in rare bipartisan cooperation.
Hardline Republicans had warned they would shoot the deal down, saying it did not have enough spending cuts, and some Democrats were also angry at the reductions made.
The bill now goes to the Senate before President Joe Biden can sign it off, allowing the government to borrow more cash to service its mammoth debts.
Failure to do so before the cash run out—said to be June 5—would have resulted in a default that many warned would hammer the global economy and markets.
After the vote, Biden said in a statement: “Tonight, the House took a critical step forward to prevent a first-ever default and protect our country’s hard-earned and historic economic recovery.
“The only path forward is a bipartisan compromise.”
House Speaker Kevin McCarthy, who drew up the deal with Biden after weeks of wrangling, said: “Passing the Fiscal Responsibility Act is a crucial first step for putting America back on track.
“It does what is responsible for our children, what is possible in divided government, and what is required by our principles and promises.”
Still, after a strong start to the day, worries over the chances of a Fed interest rate hike and ongoing weakness in China’s economy dampened the mood.
Tokyo, Sydney, Wellington, Singapore and Mumbai rose but Shanghai was flat while Hong Kong, Seoul, Taipei and Bangkok slipped. With AFP