Philippine stocks rose Tuesday after a long weekend ahead of month-end window dressing.
The bellwether Philippine Stock Exchange index added 11.45 points, or 0.16 percent, to close at 6,973.41, while the broader all-shares index climbed 11.55 points, or 0.31 percent, to end at 3,761.28
Regina Capital Development Corp. head of sales Luis Limlingan said the PSEi was slowly inching towards the 7,000 level as investors take position ahead of both MSCI rebalancing and window-dressing activities.
MSCI refers to the Morgan Stanley Capital International index, which is designed to measure the performance of the large and mid-cap segments of the market.
COL Financial research head April Lee Tan said the index may hover between 7,000 and 7,100 in the second half of the year as investors await developments overseas.
“We have to monitor how US economy will perform. The question is will be a soft landing or hard landing. A lot of people are betting on soft. So that it what we have to monitor” Tan said.
Four of sectoral indices ended in red led by services which dropped 0.40 percent and holding firms by 0.33 percent. On the other hand, property jumped 2.72 percent and mining and oil by 0.12 percent.
Value turnover reached P6.5 billion with 110 advances and 94 decliners.
Meanwhile, the peso closed at 56.28 a dollar Tuesday, up from 56.33 on Thursday. It was the highest local currency’s finish in more than four months since it settled at 56.25 on April 4.
Asian markets were mixed Tuesday following a tepid day on Wall Street as traders took a breather from a recent rally fueled by bets on a US interest rate cut, while oil held gains from a surge caused by Middle East tensions.
A string of supportive data in recent weeks and comments from top Federal Reserve officials have helped push equities higher in August after starting the month in turmoil on fears of a US recession.
Fed boss Jerome Powell confirmed in a much-anticipated speech Friday that the time had come to begin lowering borrowing costs from their two-decade highs as inflation slows to the bank’s two percent target and the labour market softens.
Talk is now centered on how much the Fed will cut next month and how far it will go afterwards.
Powell was followed Monday by the head of the San Francisco Fed, Mary Daly, saying it was “hard to imagine” not cutting next month, while Richmond chief Thomas Barkin indicated he supported “dialing down”.
Still, that was not enough to help traders build on their gains, with eyes now on the release of several data points while geopolitical concerns act as a drag on sentiment.
“Right now, market participants are likely to focus on the state of the US economy in line with the Fed’s interest rate cut cycle on whether the Fed is late in the game of enacting its interest rate cuts and the potential impact on risk assets,” said OANDA’s Kelvin Wong.
“Any leading economic data and labour market conditions… that indicate a deterioration in growth and employment may trigger another similar risk-off episode.
“If such a scenario occurs, the Fed may be forced to embark on larger interest rate cuts.”
– Eyes on Nvidia –
Among the key US indicators due this week are the personal consumption expenditure (PCE) index — the Fed’s preferred gauge of inflation — gross domestic product, personal income, spending, and consumer sentiment.
The crucial non-farm payrolls report, a big miss that helped cause a market rout at the start of the month, is due next week.
Chip titan Nvidia is also due to release its latest earnings, which will be pored over for an idea about demand for artificial intelligence after a surge this year in firms linked to the technology.
On Wall Street, the Dow edged up but the S&P 500 and Nasdaq ended in the red.
And Asia fared little better.
Hong Kong rose despite losses in the tech sector that came after Temu owner PDD posted disappointing revenue figures and warned on the outlook for future growth.
The ecommerce firm’s shares, which are listed in New York, tanked a record 28.5 percent wiping tens of billions off its market capitalization.
In Hong Kong, rivals Alibaba and JD.com both sank around four percent.
Tokyo, Manila, Bangkok and Mumbai also rose, but Shanghai, Seoul, Singapore, Sydney, Wellington, Jakarta and Taipei all slipped.
London rose as traders there returned from an extended weekend break. Paris and Frankfurt also rose.
Crude prices eased slightly but held most of Monday’s gains of at least three percent that came on concerns the Middle East crisis could spiral.
Sunday’s exchange of fire between Lebanon’s Hezbollah and Israel has ramped up fears that Iran could get involved, sparking a wider regional conflict.
Traders were also jolted by news that the eastern-based administration in oil-rich Libya will close fields under its control and suspend production and exports “until further notice”.
“A mix of geopolitical tensions, volatile oil prices, and mixed economic data has created a complex and uncertain backdrop for global financial markets,” said Luca Santos of ACY Securities.
“While the initial response has been one of caution, the evolving nature of these risks means that market conditions could change quickly.” With AFP
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