The stock market fell Friday on profit taking and a government report of the inflation rate hitting a 45-month high of 6.4 percent in June.
The Philippine Stock Exchange Index sank 77.61 points, or 1.2 percent, to 6,405.50 on a value turnover of P12.7 billion. Losers beat gainers, 108 to 66, with 49 issues unchanged.
International Container Terminal Services Inc. of business tycoon Enrique Razon Jr., the biggest port operator, dropped 1.8 percent to P184.60, while Security Bank Corp., the eighth largest lender in terms of assets, slipped 0.1 percent to 82.
SM Investments Corp. of the Sy Group declined 1.5 percent to P780, while unit BDO Unibank Inc., the largest bank, also fell 1.5 percent to P116.90.
The rest of Asian equities mostly rose Friday as a drop in oil prices to pre-Ukraine war levels stirred hopes of a slowdown in inflation and central bank interest rate hikes, while focus turns to key US jobs data later in the day.
Hong Kong, Tokyo, Shanghai, Sydney, Seoul, Jakarta, Mumbai, and Singapore rose, though Bangkok and Wellington dipped.
Taipei surged more than two percent on easing concerns over a conflict with Beijing, even as China conducts its largest-ever military exercises around Taiwan in response to US House Speaker Nancy Pelosi’s visit this week.
However, while markets have enjoyed a broadly positive week, optimism remains at a premium as traders fret over issues including the conflict in Eastern Europe, China’s military drills around Taiwan, and a possible global recession.
Crude edged up but expectations that economies will contract—dampening demand—have sent the commodity tumbling more than 10 percent this week, with US data indicating Americans were driving less now than in summer 2020 at the height of the pandemic.
And while analysts are beating the drum of recession, traders are taking heart from the possibility of a reprieve from central bank monetary tightening.
“The recent fall in oil prices, which are now trading below the levels immediately before Russia’s invasion of Ukraine, has contributed to the market’s perception that inflation is likely to peak soon, taking pressure off the Fed to raise rates as aggressively,” said National Australia Bank’s Rodrigo Catril.
Traders will now be closely watching the release of a crucial US jobs report on Friday for a fresh snapshot of the world’s top economy.
The Federal Reserve has said its rate decision will be guided by data, with signs of economic weakness seen as likely to mean any increases will be light.
Officials have said the economy remains healthy despite four-decade high inflation and a sharp lift in borrowing costs, while several have suggested they are open to more big increases to get on top of prices.
And SPI Asset Management’s Stephen Innes said: “Though some high-frequency data suggest employment and inflation have softened in some parts of the economy, markets may wonder if they are soft enough to change the course for the Fed.”
In a sign of the long road ahead, the Bank of England hiked rates by the most since it was made independent in 1997, and warned inflation will likely go higher than 13 percent while Britain will suffer an extended recession. With AFP