The stock market rebounded Monday on bargain hunting and Wall Street’s rally in response to data indicating US consumers remained resilient to surging inflation and higher interest rates, easing concerns about a possible recession.
The Philippine Stock Exchange Index advanced 73.52 points, or 1.2 percent, to 6,268.78 on a value turnover of P4.2 billion. Losers, however, edged gainers, 91 to 89, with 55 issues unchanged.
Major property developer Ayala Land Inc. of the Ayala Group jumped 10.2 percent to P24.85, while parent Ayala Corp. climbed 4.2 percent to P599.50.
Universal Robina Corp. of the Gokongwei Group, the biggest snack food maker, rose 1.2 percent to P114.80, while SM Prime Holdings Inc. of the Sy Group, the largest mall operator, added 1.2 percent to 37.45.
The rest of Asian stocks rose Monday. Still, investors continue to fret over the economic outlook, with Russia’s war in Ukraine showing no sign of ending, China locking down cities to fight a new COVID flare-up, and central banks quickly tightening monetary policy.
All three main indexes in New York had raced higher on Friday after June retail sales came in above forecasts and banking giant Citigroup’s April-June results beat expectations.
While a strong set of economic data has of late boosted bets on the US Federal Reserve lifting borrowing costs more, the latest figures were not seen as being big enough to warrant a sharper rate hike next week.
Market analysts widely expect the central bank to announce a 75 basis-point lift, though some have suggested a one percentage-point increase could be on the cards.
Policymakers have made it clear their main goal is bringing inflation down from a four-decade high, even if that stunts growth or causes a recession.
“Overall the robust US data… eased concerns about an imminent recession but is also unlikely to mount an additional case for a 100 basis point Fed hike,” said SPI Asset Management’s Stephen Innes.
“And it was about as goldilocks of a mix of headline data risk as one could have expected given the Fed’s dilemma of balancing inflation versus growth.”
Traders are keeping an eye on the European Central Bank’s next policy meeting this week where it is expected to announce its first rate hike in more than a decade.
The forecast rise has provided some support to the troubled euro, which has been hammered by fears that an energy crisis sparked by the Ukraine war will send the economy into recession.
Hong Kong, Shanghai, Sydney, Seoul, Singapore, Mumbai, Taipei, Jakarta, Bangkok and Wellington were all up. Tokyo was closed for a holiday.
However, uncertainty remains rife on trading floors, with a new spike in COVID cases in China causing concern that officials will impose fresh lockdowns in major cities including Shanghai and Beijing.
A two-month shutdown in Shanghai earlier this year hammered the world’s second-biggest economy and severely hit global supply chains.
Lanzhou, the capital of northwestern Gansu province, has ordered its 4.4 million residents to stay home, while a county in Anhui province went into lockdown from Friday.
Beihai in the southern Guangxi region on Saturday also announced lockdowns in parts of two districts that are home to more than 800,000 people. With AFP