Philippine stocks lost 2.08 points, or 0.03 percent, to close at 6,512.39 Wednesday as investors ignored the continued slowdown in inflation rate.
Analysts said investors also stayed on the sidelines as the US financial market was closed in celebration of the Fourth of July holiday.
Inflation in June fell to a more than one-year low of 5.4 percent from 6.1 percent in May helped by slower increases in the prices of food and non-alcoholic beverages, the Philippine Statistics Authority said.
BDO Capital and Investments Corp. president Eduardo Francisco said that while the government reported continued slowdown in inflation rate, interest rates were not expected to come down soon because of the US Federal Reserve’s hawkish stance.
Value turnover remained thin at P3.6 billion.
Meanwhile, equity markets sank Wednesday as another round of data showed China›s economy continued to struggle in June, with little hope that its leaders can unveil the blockbuster stimulus needed to kick start growth.
With Wall Street closed on the Independence Day holiday, investors had few other catalysts to drive business, with the rally from last week’s US inflation data already running out of steam.
Focus now turns to the release of minutes from the US Federal Reserve’s June policy meeting, which should provide an insight into oficials› thinking when they decided to pause interest rates for the first time afer 10 straight hikes.
That will be followed Friday by closely watched jobs creation data, a key guide to the state of the world›s top economy.
While the Fed and other central banks› battle against sticky inflation has been the overriding issue for investors this year, China›s struggle to get growth back on track has also been a major cause of angst.
A string of indicators in recent months has shown that policymakers have a lot of work to do to get the world›s number two economy, a key driver of global GDP, back up to speed.
The initial burst of activity seen afer the lifing of the country’s zero-Covid policy at the end of 2022 has given way to torpidity, but apart from the odd pledge of action and some small interest rate cuts, authorities have done little to address the problem.
In the latest sign of trouble, the Caixin private survey of the services sector showed that activity slowed sharply in June and at a much faster pace than feared.
That came afer an oficial reading also pointed to weakness in the sector and added to a run of sof data on trade and consumer activity, among other things.
However, analysts said that while Beijing has said it plans to provide much-needed support, the scope will be limited owing to huge debt levels in the country, meaning the bazookas deployed in the past cannot be used this time.
Measures already introduced have mainly focused on providing a floor to economic growth.
But we need more comprehensive, larger-scale and stronger-than-expected policy support at a time when market demand and confidence have not yet had a clear recovery,» said Bruce Pang, of Jones Lang LaSalle.
Asian markets slipped, with Hong Kong of more than one percent.
Shanghai, Tokyo, Sydney, Seoul, Singapore, Taipei, Mumbai, Bangkok and Manila were also in the red, along with London, Paris and Frankfurt.
Meanwhile, China-US relations remain an issue, and Xi Jinping›s government this week added to their tech standof by imposing export controls on key metals used in making microchips.
Oficials said Monday›s measure placed on shipments of gallium and germanium was to protect national security.
A day afer that move, Xi urged countries to avoid decoupling and severing supply chains.
But SPI asset Management›s Stephen Innes said: «Although largely unheard of in our day-to-day lives, China is easily the world›s dominant producer of both, and the restriction pushes the global economy one step closer to high-tech decoupling.
Indeed Tech Wars could make Trump›s trade war with China look like a board game of Axis and Allies compared to its broader impact on the high-tech world. With AFP