Stocks rose for a second day, following the release of Chinese factory data that reinforced optimism the world’s number two economy will bounce back strongly this year as it emerges from its pandemic isolation.
The PSE index, the 30-company benchmark of the Philippine Stock Exchange, gained 15 points, or 0.23 percent, to close at 6,622.45, as five of the six subsectors advanced.
The broader all-share index also went up by 9 points, or 0.28 percent, to settle at 3,549.18, on a value turnover of P7 billion. Gainers outnumbered losers, 96 to 86, while 58 issues were unchanged.
Six of the 10 most active stocks ended in the green, led by ACEN Corp. which climbed 2.85 percent to P6.49 and SM Prime Holdings Inc. which went up 2.01 percent to P35.50.
Meanwhile, Asian stocks were mixed Thursday on subdued trading as Federal Reserve interest rate hike worries returned to the agenda with two top officials warning more tightening will be needed to slay inflation.
The long-running saga over prices, borrowing costs and recession speculation returned to the fore in US trading.
The S&P 500 and Nasdaq closed in the red after the comments from Fed policymakers Raphael Bostic and Neel Kashkari, which pointed to rates going higher than feared and for an extended period.
Atlanta Fed chief Bostic warned they could go well above five percent, adding that once inflation had come down to the bank’s two percent target officials should not loosen policy too soon.
“History teaches that if we ease up on inflation before it is thoroughly subdued, it can flare anew,” he wrote. “That happened with disastrous results in the 1970s.”
And Minneapolis boss Kashkari said he was still “open-minded” about backing a 50-basis-point hike at the next policy meeting, double the most recent increase.
“We’re not yet seeing much of a sign of our interest-rate increases slowing down the services sector of the economy and that is concerning to me,” he said.
“Wage growth is at a level that it actually is too high to be consistent” with the Fed’s two percent target.
There is a growing expectation rates will top out around 5.5 percent, though some commentators are tipping six percent, from the current 4.5-4.75 percent.
The comments came as fresh data showed the US Institute for Supply Management’s manufacturing report showed a jump in the prices index, while the yield on 10-year US Treasuries — a proxy for future rates — broke four percent for the first time since November.
And inflation continues to hold up in Europe.
Hong Kong retreated after a four percent surge Wednesday, while Tokyo, Shanghai, Singapore and Mumbai were also in the red with Manila marginally down.
However, Sydney, Seoul, Wellington, Bangkok and Jakarta edged higher.
London, Paris and Frankfurt all fell at the open.
Still, the China reopening narrative provided some support for nervous investors.
“The good news out of China is what the market has really needed at this point where globally we are seeing these inflation concerns not dying out,” Charu Chanana, of Saxo Capital Markets, told Bloomberg Television.
However, she added that even this could prove problematic for those worried about inflation.
“The China reopening story adds cyclical upside pressure because of the sheer amount of demand that China can create,” she said. With AFP