Stocks rose for a third day after the Philippine Statistics Authority reported that the gross domestic product expanded 6.4 percent in the first quarter within the government’s target.
The PSE index, the 30-company bellweather of the Philippine Stock Exchange, gained 16 points, or 0.25 percent, to close at 6,675.46 as four of the six subsectors advanced, led by property.
The index representing all shares also picked up 5 points, or 0.15 percent, to settle at 3,551.48, on a value turnover of P6.24 billion. Losers outnumbered gainers, 98 to 66, while 62 issues were unchanged.
Seven of the 10 most active stocks ended in the green, led by Bloomberry Resorts Corp. which climbed 3.27 percent to P11.36 and SM Prime Holdings Inc. which went up 1.76 percent to P34.60.
The peso, however, retreated to 55.75 against the US dollar Thursday from 55.67 on Wednesday on reports of widening trade deficit.
Asian markets mostly fell Thursday as investors shrugged at data showing US inflation dipped further but only marginally, suggesting the Federal Reserve still had much to do in its battle against rising prices.
Adding to the uncertainty was the battle to raise the US debt ceiling to avert a destabilizing default, with Democrats and Republicans unable to reach a deal just weeks before the country runs out of cash to pay its bills.
The consumer price index reading was the lowest in two years and a tad below what was expected, giving the Fed a little room to take a break in its long-running rate hike campaign.
However, the figure came after a stronger-than-expected print Friday on jobs creation that showed the world’s top economy remained strong, while observers said further evidence was needed to show that the tightening was bearing fruit.
The 4.9 percent rise in April was far above the Fed’s stated goal of two percent, which some analysts said meant it was unlikely officials would consider cutting rates at the end of the year, as some investors had been betting on.
“The Fed’s policy is working — inflation is coming down, but inflation is still too high,” Valentine Ainouz, at the Amundi Institute, told Bloomberg Television.
“I expect the Fed to maintain rates higher for longer than the market expects.”
And Priya Misra at TD Securities added: “We need more CPI prints to clarify that inflation is definitely declining. With AFP
“Markets may be too optimistic and put too much weight on the weakness in some series that are inherently volatile, such as hotels.”
Still, Wall Street largely cheered the figures, with the S&P 500 and Nasdaq rallying, helped by a bump in rate-sensitive tech giants, though the Dow dipped.
Asia was unable to track that.
Hong Kong and Shanghai edged down as below-forecast Chinese inflation data indicated the nation’s economic recovery was still struggling, though it gave the central bank room to provide some stimulus.
Sydney, Seoul, Singapore, Wellington, Taipei, Bangkok and Jakarta also fell. Tokyo was flat while Manila and Mumbai edged up.
London, Paris and Frankfurt rose in early trade.
The dollar rose, bouncing back from Wednesday’s losses against its peers that were fueled by a pick-up in bets the Fed will not lift rates in June.
The US debt ceiling standoff continues to cause unease on trading floors as party leaders struggle to reach a consensus to allow more borrowing.
President Joe Biden and Republican House Speaker Kevin McCarthy plan to hold another meeting on Friday.
Biden’s Treasury Secretary Janet Yellen warned Thursday about political brinkmanship over the issue.
“In my assessment — and that of economists across the board — a default on US obligations would produce an economic and financial catastrophe,” Yellen said in a speech at G7 finance talks in Japan.
“Short of a default, brinkmanship over the debt limit can also impose serious economic costs.”
Biden has threatened to call off a trip to Asia, including in-person attendance at next weekend’s Group of Seven summit, if the deepening standoff is not resolved soon.
Earlier, former president Donald Trump, who is seeking re-election in 2024, said during a CNN town hall that Republicans should refuse to raise the US debt limit if they do not get the spending cuts they are demanding. With AFP