The stock market closed virtually flat Wednesday ahead of a crucial US inflation report later in the day, which could have a huge bearing on the Federal Reserve’s plans for raising interest rates.
The Philippine Stock Exchange Index added just 2.87 points, or 0.04 percent, to 6,471.84 on a value turnover of P6.3 billion. Gainers beat losers, 111 to 59, with 63 issues unchanged.
PLDT Inc. of Indonesia’s Salim Group, the biggest telecommunications firm, rose 1.8 percent to P1,780, while SM Prime Holdings Inc. of the Sy Group, the largest operator of shopping malls, gained 0.9 percent at P37.65.
ACEN Corp. of the Ayala Group, however, dropped 2.9 percent to P8.39, while BDO Unibank Inc., the biggest lender in terms of assets, fell 1.9 percent to P112.80.
The rest of Asian equities fell Wednesday, tracking a drop on Wall Street.
Investors are preparing for the consumer price figures with a sense of dread as analysts warn a forecast-beating reading would ramp up bets on another big Federal Reserve hike and reinforce recession expectations.
Tech firms led losses in New York, with the Nasdaq off more than one percent, and they did so in early Asian trade.
Hong Kong led losses, shedding two percent, while Shanghai, Tokyo, Sydney, Seoul, Mumbai, Wellington, Taipei, Bangkok and Jakarta also dropped.
Traders were unmoved by the news that China’s consumer price index rose last month to a two-year high but came in below expectations.
The US central bank has said its decision on when and by how much to tighten monetary policy will be driven by data as it struggles to walk a fine line between bringing inflation down from four-decade highs and trying not to damage the economy.
There had been hope that recent indicators showing activity slowing would give the Fed room to be less hawkish. But a bigger-than-predicted jump in jobs last month revived talk of a third straight three-quarter-point hike in September.
“The (Fed policy board) will need to make sure inflation moves back towards target sustainably before contemplating pausing its tightening cycle,” Carol Kong, of Commonwealth Bank of Australia, said.
“A strong inflation outcome today will likely reinforce the (board) is still some way away from that point yet, and see markets readjust higher their expectations for US interest rates.”
Wednesday’s figures come at a sensitive time for world markets, which have been buffeted by a range of other issues including the war in Ukraine, supply chain snarls and rising China-US tensions over Taiwan.
While the latest earning season has been less painful than feared, there are increasing signs that the economic slowdown is beginning to impact companies, with some major firms—including Apple and Amazon—providing downbeat outlooks.
Chip-maker Micron became the latest, saying revenue would likely come in at the low end of its forecasts in the fourth quarter owing to weak demand. That came a day after rival Nvidia unveiled disappointing results. With AFP