Philippine stocks fell again Thursday after the government lowered its economic growth targets for 2024.
The Philippine Stock Exchange index lost 36.76 points, or 0.54 percent, to close at 6,827.06, while the broader all-shares index slipped 9.06 points, or 0.25 percent, to settle at 3,580.32.
“This Thursday, the local market dropped by 36.76 points as local worries takeover sentiment while catalysts are yet to be seen,” Philstocks Financial Inc. research analyst Mikhail Plopenio.
The government lowered its 2024 gross domestic product (GDP) growth target to a range of 6.0 percent to 7.0 percent from the earlier estimate of 6.5 percent to 7.5 percent.
Plopenio said inflation concerns also heightened as the Department of Agriculture expects that rice price would remain elevated until the middle of next year.
Meanwhile, Asian markets were mixed Thursday after US data provided a fresh indicator that inflation was easing and Federal Reserve boss Jerome Powell soothed worries around the bank’s plans to cut interest rates this year.
An equities rally that started at the back end of 2023 has stuttered in recent weeks after a string of reports suggested the economy was too strong and prices too sticky for officials to begin easing monetary policy this year.
Warnings from decision-makers that they were worried about bringing down borrowing costs too soon have also played on investors’ minds, causing them to pare back expectations for how many rate cuts — if any — were coming before January.
But those concerns were allayed somewhat Wednesday when Powell said he still saw cuts coming this year.
He told a conference in California that rates, which are at a two-decade high, were doing their job but moving too soon could be “quite disruptive” for the world’s top economy.
But if the economy continues to evolve as expected, most Fed participants still anticipate it will be “appropriate to begin lowering the policy rate at some point this year”.
Evercore’s Krishna Guha said: “Powell says recent data has not materially changed the picture.
“We read this as confirming that the spasm of concern in markets that the economy might be too strong for the Fed to cut in June was overdone — and the base case remains June and three cuts this year.”
Confidence among traders was given an extra lift by figures showing a slowdown in growth in the services sector and a sharp drop in input costs during March, suggesting an easing of inflation.
That contrasted with a stronger-than-expected reading of US manufacturing and prices paid earlier this week, which sparked questions about the Fed’s rate-cutting timeline.
A report pointing to a further slowdown in eurozone inflation gave confidence another boost.
Traders are now looking forward to the release of US jobs data, which is due Friday, and could have a bearing on the Fed’s plans.
A big miss on the downside could boost hopes for a June rate cut, though a forecast-beating read would likely spark a sell-off in markets.
The S&P 500 and Nasdaq rose on Wall Street, and most of Asia followed suit.
Tokyo, Sydney, Seoul, Singapore and Jakarta were all in the green, though there were losses in Mumbai, Bangkok, Manila and Wellington.
London was slightly higher at the open, while Paris was flat and Frankfurt edged lower.
Hong Kong and Shanghai were closed for holidays.
Gold hit another record, $2,304.96 per ounce, according to Bloomberg News, after Powell’s remarks and amid geopolitical concerns fueled by the Middle East crisis and Ukraine war.
And oil was sitting around five-month highs owing to worries about Israel’s war with Hamas and Iran’s warning of retaliation over a blast at a consular annex in Damascus that killed seven Revolutionary Guards, including two generals. Tehran blames Israel for the fatal strike.
A call by OPEC+ for its members to maintain its strategy of reducing output also helped push up prices. With AFP