Stocks closed virtually flat Monday to herald the ghost month of August, with many investors adopting a wait-and-see attitude on the next move of monetary authorities to contain inflation.
The Philippine Stock Exchange Index slipped 3.90 points, or 0.06 percent, to 6.312.03 on a value turnover of P5.2 billion. Losers edged gainers, 92 to 85, with 55 issues unchanged.
International Container Terminal Services Inc. of tycoon Enrique Razon Jr., the biggest port operator, tumbled 5.3 percent to P183.90, while BDO Unibank Inc. of the Sy Group, the largest lender in terms of assets, dropped 4.8 percent to P113.80.
Manila Electric Co., the biggest retailer of electricity, fell 3.8 percent to P327.20, but Universal Robina Corp. of the Gokongwei Group, the largest snack food maker, surged 6 percent to 117.70 .
The rest of Asian markets mostly rose Monday and oil fell as investors brushed off both weak data from China and comments indicating the Federal Reserve is wedded to its anti-inflation rate hike campaign.
Asian markets opened the day cautiously as investors struggled to extend Wall Street’s lead, but they picked up in the afternoon.
Hong Kong and Shanghai recovered after sinking in reaction to another disappointing reading on the Chinese economy.
Tokyo, Sydney, Seoul, Mumbai, Singapore, Bangkok, Jakarta and Wellington edged up, though Taipei edged slightly lower.
Strong earnings from Wall Street titans Amazon and Apple had helped US markets end last week with healthy gains and eased concerns about the impact on consumers of surging inflation and rising borrowing costs.
That came after investors took Fed chief Jerome Powell’s comments Wednesday after a policy meeting to indicate the central bank could start slowing down monetary tightening, providing a much-needed boost to stocks.
However, analysts warned that inflation would take time to come down from its four-decade highs and that there were undoubtedly more rate hikes to come.
Officials backed that up at the weekend, with Minneapolis Fed chief Neel Kashkari telling The New York Times that he was “surprised by markets’ interpretation” of the latest Fed meeting statement.
“I think we’re going to continue to do what we need to do until we are convinced that inflation is well on its way back down to two percent,” he said. “We are a long way away from that.”
And Atlanta Fed president Raphael Bostic said he did not think the economy was in recession owing to ongoing jobs growth but that inflation remained too high and he was “convinced” more must be done.
Still, Treasuries continued to fall, with the 10-year yield at 2.67 percent, well down from June’s peak near 3.50 percent, suggesting expectations for future rates are easing.
Inflation pressure could get some relief following news that the first shipment of Ukrainian grain left the port of Odessa on Monday under a deal aimed at relieving a global food crisis following the Russian invasion.
The closely watched Purchasing Managers’ Index of manufacturing activity shrank in July on the back of weak demand and the strict zero-COVID measures imposed in parts of the country. With AFP