Stocks slightly declined Thursday ahead of the Bangko Sentral ng Pilipinas’ decision to pause its monetary tightening cycle as inflation rate continued to soften.
The PSE index, the 30-company bellwether of the Philippine Stock Exchange, lost 6 points, or 0.10 percent, to close at 6,628.64, as one of the six subsectors ended in the red.
The broader all-shares index barely moved to close at 3,534.64 on a value turnover of P3.96 billion. Gainers led losers, 90 to 81, while 61 issues were unchanged.
Five of the 10 most active stocks ended in the green, led by Megaworld Corp. which climbed 3.47 percent to P2.09 and PLDT Inc. which rose 2.41 percent to P1,275.00.
Meanwhile, the peso went up 0.21 percent to finish at 55.87 against the US dollar Thursday from 56.2 Wednesday.
Asian and European investors on Thursday tracked a strong Wall Street rally, fanned by optimism over talks to avert a catastrophic US debt default.
Markets have been skittish in recent sessions with Republicans and Democrats unable to find common ground as the deadline for a deal to raise the country’s borrowing limit approached.
But talks this week between President Joe Biden, House Speaker Kevin McCarthy and congressional leaders appear to have been more fruitful.
“I’m confident that we’ll get the agreement that we need on the budget and that America will not default,” Biden said at the White House just before he set off for the G7 summit in Japan.
McCarthy added that Biden and Democratic Senate Majority Leader Chuck Schumer had “finally backed off the insane, irrational, unsensible idea that you just raise the debt ceiling.”
“I’m optimistic about our ability to work together,” he said. “The only question of whether we have a Biden default is the president himself.”
Treasury Secretary Janet Yellen has warned that the US government would likely run out of cash by June 1 while the non-partisan Congressional Budget Office has forecast June 15.
Most economists have warned that world markets would be sent into turmoil and the already fragile global economy would take a severe hit if lawmakers do not lift the debt ceiling and the United States defaults.
And in a sign of the worry the issue is causing on Wall Street, a number of top bank executives visited Washington to hold talks with congressional leaders.
Afterwards, JPMorgan Chase CEO Jamie Dimon told reporters: “The US should not and probably will not default.”
The news of progress was greeted warmly on Wall Street, where all three main indexes ended more than one percent higher, and Asia followed in early business Thursday.
Tokyo piled on more than one percent, while there were also healthy gains in Hong Kong, Shanghai, Sydney, Seoul, Singapore, Taipei, Manila, Taipei, Mumbai, Bangkok and Wellington. With AFP