Stocks closed nearly flat Tuesday to break out of a slump that saw the benchmark index sinking below 6,500 points in the previous session.
The Philippine Stock Exchange Index added just 7.52 points, or 0.1 percent, to 6,474.53 on a value turnover of P5.6 billion. Losers, however, beat gainers, 118 to 62, withy 44 issues unchanged.
SM Investments Corp. of the Sy Group advanced 3 percent to P830, while PLDT Inc. of Indonesia’s Salim Group, the biggest telecommunications firm, also rose 3 percent to P1,850.
Major property developer Ayala land Inc. of the Ayala Group, however, fell 2.3 percent to P29.35, while International Container Terminal Services Inc. of tycoon Enrique Razon Jr., the largest port operator, declined 2.5 percent to P195.
Meanwhile, Asian equities mostly fell Tuesday after the previous day’s global rout but dip-buying helped pare early losses, while Europe saw gains, with attention turning to the Federal Reserve as it prepares to ramp up interest rates to fight runaway inflation.
Panic has swept through trading floors since data on Friday showed US consumer prices rising at their fastest pace in a generation owing to a spike in energy and food costs caused by the Ukraine war, China’s lockdowns and supply chain snarls.
The pain has been felt across all assets, with bitcoin threatening to fall below $20,000 for the first time since December 2020, currencies retreating against the dollar, and even safe-haven plays including the yen and gold feeling the squeeze.
In Asia dip-buying helped some markets recover to positive territory, and others pare the morning’s drop.
Sydney shed 3.6 percent but was much better off than the initial losses of around five percent as traders there returned after a long weekend.
Tokyo, Seoul, Singapore, Wellington and Taipei were also lower.
Hong Kong was marginally higher and Shanghai edged up, while there were also advances in Mumbai, Bangkok and Jakarta.
Investors are now laser-focused on Wednesday’s Fed interest rate decision as it struggles to walk a fine line between reining in inflation and trying to keep the economy on track.
Danielle DiMartino Booth, at Quill Intelligence, said: “While tightening into a recession is no easy task, the Federal Reserve must indicate a willingness to raise interest rates by more than a half-percentage point at upcoming meetings if inflation continues to surprise to the upside.”
But JP Morgan Asset Management’s Tai Hui warned: “While there is no doubt that inflation is a considerable challenge for the US at this point, slamming on the brakes too hard risks pushing the economy off its track.”
Before Friday’s news, expectations had been for a 50-point basis hike and a signal that more of the same was to come at the next few meetings. But now analysts say there is a one-in-three chance officials could announce a three-quarter point increase, with some even predicting a one percentage point hike.
That has ramped up fears that the world’s top economy is heading for a recession, and on Monday Wall Street plunged with the broad-based S&P 500 sinking into a bear market after dropping more than 20 percent from its recent peak. With AFP