Stocks barely moved Tuesday, with investors awaiting the release of key US inflation data that could play a big role in the Federal Reserve’s keenly-anticipated interest rate decision.
The PSE index, the 30-company benchmark of the Philippine Stock Exchange, rose 0.11 point to close at 6,507.26, as four of the six subsectors retreated.
The broader all-shares index lost 8 points, or 0.26 percent, to settle at 3,467.25 on a value turnover of P5.5 billion. Losers outnumbered gainers, 127 to 68, while 43 issues were unchanged.
Globe Telecom Inc. led three of the 10 most active stocks that ended in the green, as it rose 2.75 percent to P1,834.00. Ayala Land Inc. gained 0.60 percent to P25.00, while Bank of the Philippine Islands added 0.58 percent to finish at P104.90.
Meanwhile, the peso strengthened to 55.95 against the US dollar Tuesday from 56.05 in the previous trading day.
Most Asian markets rose. Expectations are for the US central bank to hold fire at the end of its meeting Wednesday—after 10 straight hikes—as data suggested the economy remained healthy but was showing signs that the tightening measures were kicking in.
Analysts said bets are on a pause for another increase next month, though they warned that a forecast-busting reading on the consumer price index could force officials to keep lifting.
Optimism that borrowing costs will be held — traders have priced in a 20 percent chance of a hike — has helped push stocks higher this month, with the S&P 500 now in a bull market, having risen 20 percent from its October lows.
“The committee is expected to skip the June meeting but still pair that with hawkish communications to counter any sense that a June pause trumpets the end of their hiking campaign,” said SPI Asset Management’s Stephen Innes.
“However, a big upside surprise in today’s CPI could move the rate hike needle for June up to and above 50-50.”
After a strong performance on Wall Street, Asia struggled in the morning but picked up as the day wore on.
Tokyo, Hong Kong, Shanghai, Sydney, Seoul, Wellington, Mumbai, Bangkok, Jakarta and Taipei rose, while London, Paris and Frankfurt jumped in the morning.
The Fed decision comes as central banks around the world continue to struggle in their battle against inflation, which remains well above their two percent targets.
The European Central Bank is expected to unveil another increase Thursday despite the eurozone dipping into recession, while the Bank of Japan is tipped to stand pat when it meets Friday.
Canada and Australia announced increases last week.
But China on Tuesday announced a small cut in its short-term lending rates as authorities try to kickstart a recovery in the economy, which has run out of steam after an initial burst following the lifting of zero-Covid restrictions.
The move comes after figures showed inflation remained subdued and saw the yuan drop against the dollar, though the currency pared the losses on reports that fresh stimulus measures were being discussed.
The cut reveals “growing concerns among policymakers about the health of China’s recovery”, Capital Economics economist Julian Evans-Pritchard wrote in a note.
China’s ongoing problems remained a weight on the crude market as investors fretted over the impact on demand, even after Saudi Arabia’s surprise decision to slash output by a million barrels a day next month.
WTI is down about 15 percent this year and Brent has lost around 13 percent.
Both contracts rose Tuesday but made little headway into the four percent losses suffered the day before as Goldman Sachs slashed its price forecast for the third time in six months. With AFP