Stocks rebounded Wednesday after the World Bank raised its 2023 growth outlook for the Philippines to 6.0 percent from 5.6 percent and investors held out hope the US Federal Reserve will skip an interest rate hike this month.
The PSE index, the 30-company benchmark of the Philippine Stock Exchange, gained 84 points, or 1.31 percent, to close at 6,564.70 as all six subsectors advanced, led by holding firms.
The broader all-shares index went up 26 points, or 0.75 percent, to settle at 3,495.65 on a value turnover of P4.1 billion. Gainers led losers, 97 to 79, while 44 issues were unchanged.
Nine of the 10 most active stocks ended in the green, led by Ayala Corp. which climbed 2.90 percent to P674.00 and PLDT Inc. which rose 2.44 percent to P1,259.00.
The peso also advanced 0.22 percent Wednesday to close at 56.098 against the US dollar from 56.22 Tuesday.
Meanwhile, Asian markets were mixed Wednesday. Reports that US Secretary of State Antony Blinken will visit China provided optimism for a thawing of relations between the superpowers, but with a lackluster Wall Street performance and few catalysts to drive business, regional traders moved cautiously.
Meanwhile, a World Bank warning on the global economic outlook gave some food for thought as it lowered its growth expectations for next year.
Traders are keeping tabs on China, with reports saying authorities have asked the country’s biggest banks to lower their deposit rates in a bid to boost the economy as it struggles to recover from years of zero-Covid lockdowns.
Analysts said such a move could indicate the People’s Bank of China was considering an interest rate cut as soon as this month.
The need for fresh help was highlighted Wednesday by data showing Chinese exports tumbled more than seven percent in May, far more than expected and the first drop since February.
The reading follows figures showing shrinking factory activity and showed the uphill task officials have in kickstarting the economy. And while imports performed better than forecasts, there remain concerns over consumer activity.
The report was “yet another disappointing data which will raise growth concerns and intensify expectations of more policy support”, said Khoon Goh, at Australia and New Zealand Banking Group.
Figures also showed China’s total trade with Russia hit $20.5 billion in May, its highest level in a single month since Moscow’s invasion of Ukraine.
Speculation is swirling that Blinken will fly to Beijing within the next few weeks in a bid to get relations back on track after his planned visit in February was called off over what Washington said was a Chinese spy balloon.
With reports saying Blinken could meet President Xi Jinping, there are hopes the two sides could calm tensions that have chilled world markets for years.
Hong Kong resumed its recent advance thanks to a tech rally, while Shanghai was also in positive territory though both pared morning gains.
There were also positives in Taipei and Mumbai while Seoul was flat.
Tokyo dropped 1.8 percent after enjoying strong recent buying interest — the Nikkei 225 has piled on about a fifth since mid-March — while Singapore, Sydney, Bangkok, Jakarta and Wellington also struggled.
London, Paris and Frankfurt all fell in the morning.
Next week’s Fed policy decision is also in focus, with investors hoping officials will decide not to lift borrowing costs for an 11th successive meeting, in light of data indicating more than a year of tightening is beginning to kick in.
A mixed jobs report last week, which showed a pickup in hiring but slower wage growth, suggested the US economy remained healthy and gave the central bank room to skip a hike this month, even as inflation remains sticky.
However, there appears to be a split among monetary policymakers on the way forward, and with a so-called blackout period for board members now in place, traders will have no insight until decision day.
The World Bank warned Tuesday that the global economy faced headwinds going into 2024 owing to restrictive central bank monetary policies and the possibility of more upheaval among struggling lenders.
It lifted its growth outlook for this year to 2.1 percent from an earlier 1.7 percent estimate but lowered its forecast for next year to 2.4 percent from 2.7 percent.
“Global growth is projected to slow significantly in the second half of this year, with weakness continuing in 2024,” the World Bank said. With AFP