Stocks advanced but the Philippine peso tumbled to its lowest level this year after the Bangko Sentral ng Pilipinas floated the possibility it would end its monetary tightening cycle in May as local inflation began to ebb.
The Philippine Stock Exchange index, the 30-company benchmark, rose 23 points, or 0.37 percent, to close at 6,505.61, as four of the six subsectors advanced.
The index representing all shares also picked up 8 points to settle at 3,489.54 on a value turnover of P4.39 billion. Losers outnumbered gainers, 98 to 82, while 61 issues were unchanged.
Six of the 10 most active stocks ended in the green, led by Lodestar Investment Holdings Corp. which jumped 23.44 percent to P0.79. Ayala Corp. gained 3.97 percent to P655.00, while Jollibee Foods Corp. rose 2.33 percent to P219.60.
The peso retreated 1.16 percent Monday to 55.85 against the US dollar from 55.21 on Friday. It was also down 0.17 percent since the start of this year’s trading.
Meanwhile, Asian stock markets mostly rose Monday as traders weighed a bigger-than-expected drop in US retail sales and the prospect of further Federal Reserve monetary tightening.
The mood was helped by forecast-beating earnings from US banking titans that eased concerns about the sector after last month’s turmoil that saw three regional lenders go under.
Investors built on last week’s broad rally that came on the back of data showing inflation falling quicker than estimated last month, which fanned hopes the Fed will bring its interest rate hiking campaign to an end soon.
Analysts said that while the one percent drop in retail sales—double what was forecast—could give the US central bank more room to pause, it also revived worries that the world’s top economy could tip into recession.
Despite figures pointing to prices falling, a survey by the University of Michigan on Friday showed consumers’ expectations for inflation rose this month to 4.6 percent annually, from 3.6 percent in March.
Meanwhile, Fed governor Christopher Waller dented hopes the bank will ease back on its tightening campaign soon, saying on Friday that rates should continue going up as inflation remained elevated.
“Because financial conditions have not significantly tightened, the labor market continues to be strong and quite tight, and inflation is far above target, so monetary policy needs to be tightened further,” he warned.
“How much further will depend on incoming data on inflation, the real economy, and the extent of tightening credit conditions.”
Commentators said there is a broad belief the Fed will hike borrowing costs 25 basis points next month, though some say another rise could be in the pipeline for June.
Asian investors got off to a slow start in Asia but confidence picked up as the day wore on.
Hong Kong and Shanghai led gains, climbing more than one percent, while there were also advances in Tokyo, Sydney, Singapore, Seoul, Taipei, Bangkok and Wellington. With AFP