Stocks rebounded Monday on bargain-hunting after the benchmark index plunged 8.3 percent last week amid concerns on rising inflation and interest rates.
The PSEi, the 30-company barometer of the Philippine Stock Exchange, picked up 42 points, or 0.7 percent, to close at 5,783.15 as four of the six major subsectors posted gains.
The broader all-share index also rose by 6 points, or 0.20 percent, to settle at 3,114.13 on a value turnover of P3.9 billion.
Losers outnumbered gainers, 139 to 51, while 43 issues were unchanged.
Eight of the 10 most active stocks ended in the green, led by Manila Electric Co. which advanced 5.4 percent to P277.20 and SM Investments Corp. which went up 4.8 percent to P760.00.
Meanwhile, most Asian stocks slipped on Monday as investors await key US jobs data, while girding themselves for a corporate earnings season many fear will highlight the impact of surging inflation and interest rates.
A report showing prices rose in the eurozone at a record pace last month added concerns that central bank tightening has a long way to go, while Federal Reserve vice-chair Lael Brainard said US officials would not pull back too early.
Banks’ battle against inflation could also be made harder as reports said OPEC and other oil producers are considering a major output cut owing to a plunge in prices caused by demand worries.
Crude prices jumped more than 3 percent in Asian trade ahead of the possible cut.
Sterling enjoyed a brief rally above $1.12—having hit a record low $1.0350 last Monday—after UK finance minister Kwasi Kwarteng made a major U-turn by saying he had scrapped controversial plans to axe the top income tax rate.
The cut was part of a controversial mini-budget unveiled by Kwarteng last Monday, which sent markets spinning.
Kwarteng’s announcement came as the ruling Conservatives hold their annual conference with new Prime Minister Liz Truss facing growing anger within the party.
The pound briefly hit a high of $1.1281 before easing back again.
All three main indexes on Wall Street ended down Friday, registering a third straight quarter of losses for the first time since the global financial crisis in 2009.
The release of US jobs data on Friday will be closely watched, with a strong reading likely to give the Fed more ammunition to unveil a fourth successive bumper rate hike at its November meeting.
Asian equity markets fell at the start of the week.
Hong Kong, Sydney, Mumbai, Bangkok, Singapore, Taipei, Jakarta and Wellington followed suit.
Tokyo rose, however, even as the Bank of Japan’s Tankan survey showed confidence fell among the country’s largest manufacturers for the third straight quarter. Manila also rose.
London, Paris and Frankfurt all sank more than one percent at the open.
With inflation remaining elevated, there is little prospect that the pain will ease any time soon.
On Friday, Brainard said: “Monetary policy will need to be restrictive for some time to have confidence that inflation is moving back to target.
“For these reasons, we are committed to avoiding pulling back prematurely.”
The comments were in line with other Fed officials, who have indicated borrowing costs were unlikely to be lowered until late 2023 or 2024.
“Last week’s developments reinforced our expectation that we will see further tightening in financial conditions, but also illustrated the short-term two-way volatility, which will likely accompany it,” Citigroup’s Ebrahim Rahbari said.
At a time of rising real rates, volatility and the strong dollar “we therefore remain very bearish regarding the outlook for global risk assets,” he added.
Markets are now bracing for company earnings reports, with traders keeping a close eye on their forecasts in light of the uncertain rate environment.
Saxo Capital Markets analysts said in a note that there was a risk-off mood “as corporate earnings misses continue to raise the threat of an ugly earnings season ahead”.
Both the US benchmark West Texas Intermediate crude and Brent climbed 3.3 percent, as reports said major producers were discussing a million-barrel per day cut in output to support prices in the face of falling demand.
The reduction would be the biggest since the pandemic began, when crude prices collapsed, and would help staunch a plunge in the oil markets over recent months. With AFP