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Thursday, June 13, 2024

PH stocks up on easing ME tensions, peso closes at 57.54 a dollar

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Philippine stocks opened the week flat as investors stayed on the sidelines after last week’s sell strong sell-off.

The Philippine Stock Exchange index, the country’s main barometer, inched up by 1.08 points, or 0.02 percent, to close at 6,444.08, while the broader all-shares index picked up 4.16 points, or 0.12 percent, to 3,425.71.

Meanwhile, the peso closed at 57.54 against the US dollar, stronger than Friday’s 57.65.

Rizal Commercial Banking Corp. research head Michael Ricafort said the stock market corrected slightly higher after tension in the Middle East subsided for now with no new response/retaliation after the last one.

The decline in global crude prices also provided some relief to the market as this eases concerns on rising inflation and interest rates.

“Any healthy upward correction at the PSEi could be possible, especially if the markets already priced in most or all the bad news related to recent geopolitical risks/risk aversion due to increased tension in the Middle East,” Ricafort said.

Market value turnover was thin at P3.41 billion, lower than month-to-date average of P5.16 billion.

Meanwhile, Asian markets rose Monday, clawing back some of last week’s losses, as Middle East worries subsided, and traders looked ahead to the release of key US inflation data and corporate earnings.

With Iran downplaying a reported Israeli attack on the country, which came days after a drone and missile strike on Israel by Tehran, tensions between the regional foes appeared to have cooled.

While the situation remains tense, the lack of escalation over the weekend provided traders with an opportunity to pick up equities and helped push oil down.

The gains came despite a largely negative lead from Wall Street, where the Nasdaq shed more than two percent owing to hefty selling in tech giants including Amazon, Apple and Netflix.

Investors are now setting their sights on the personal consumption expenditures (PCE) index, the Federal Reserve’s preferred gauge of inflation, which is due on Friday.

The reading could play a major role in the central bank’s decision-making on interest rates, and comes after a third successive month of above-forecast consumer price index figures.

The disappointing CPI data has dented hopes for a cut in June, and traders have scaled back their outlook for how many the Fed will make this year.

The PCE report is followed by the bank’s policy announcement next week, which will be pored over for clues about its next step.

Several officials have lined up to temper expectations for cuts, citing sticky inflation as well as a still-strong economy and labor market.

Chicago Fed boss Austan Goolsbee said last week that the battle against surging prices had stalled.

“Right now, it makes sense to wait and get more clarity before moving,” he said, warning that bringing inflation back to the bank’s two percent goal would likely take longer than initially thought.

Hong Kong led gainers, jumping 1.8 percent, while Tokyo, Sydney, Seoul, Singapore, Mumbai, Manila, Bangkok and Wellington also rose.

There were small losses in Shanghai, Jakarta and Taipei, however.

London, Paris and Frankfurt all rose in the morning.

Earnings from big-name firms including Google parent Alphabet, Tesla and Microsoft are also in play this week, with investors hoping for strong reports to back up a recent surge in equities. With AFP

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