Philippines stocks advanced Wednesday even as the 2023 gross domestic product (GDP) growth fell below the government’s target.
The 30-company Philippine Stock Exchange index traded above 6,700 at mid-day before closing at 6,646.44, up 24.43 points, or 0.37 percent, from previous day’s finish. The broader all-shares index picked up 11.78 points, or 0.34 percent, to finish at 3,499.49.
China Bank Capital managing director Juan Paolo Colet said the investors still welcomed the 5.6-percent growth for 2023 as this signals that the economy remains strong.
“Although this was below the government’s target of at least 6-percent, the market viewed the data positively as this was not only above the median estimate of many economists, but also showed that the Philippines was the fastest-growing economy among ASEAN countries that have published their respective GDP data to date,” Colet said.
Value turnover reached P6.3 billion.
The peso also climbed to 56.275 against the US dollar Wednesday from 56.401 Tuesday.
Meanwhile, Asian equities were mixed Wednesday after a tepid performance on Wall Street, with traders keenly awaiting what the Federal Reserve has to say after its much-anticipated policy meeting later in the day.
A key Treasury auction, US jobs figures and earnings from some of the world’s biggest companies including Apple and Amazon were also in view this week.
That all comes while the crisis surrounding China’s fallen property titan Evergrande casts a shadow and stokes worries about the world’s number two economy.
While the Dow clocked up another record in New York, the S&P 500 and Nasdaq went into reverse as a forecast-beating read on US job openings reinforced the view that the labor market remained resilient despite interest rates sitting at two-decade highs.
And while that came with figures showing consumer confidence at a more than two-year high in January and inflation expectations falling, traders are worried the Fed will not cut borrowing costs as much as had been expected just a few weeks ago.
The odds on a March reduction are now about one in three, according to Bloomberg News, which added that hopes for a continued loosening of monetary policy through 2024 were also fading.
Fed guidance last month suggested about three cuts this year, but at one point markets had priced in as many as six.
Bank decision-makers are expected to conclude their most recent meeting later Wednesday by keeping rates unchanged, but their statement and comments by boss Jerome Powell will be pored over for clues about their thinking ahead of the March gathering.
Wednesday “may be significant for markets as the cross-currents of big-tech earnings, the ADP jobs report, the distribution of Treasury issuance, and Powell comments meet at a critical juncture”, Jose Torres, of Interactive Brokers, said.
“I’m expecting Powell to take some rate cuts off the table by perhaps even calling the current projections aggressive.”
And Greg Whitely at DoubleLine added that officials’ remarks indicated “there will be room for the Fed to cut rates this year, but it’s not going to happen as soon as the market is pricing”.
The meeting is followed Friday by the closely followed non-farm payrolls report, which provides the clearest guide to the strength of the labor market. A reading on private-sector hiring is due later Wednesday.
Meanwhile, traders are nervously keeping tabs on developments in the Evergrande saga after a Hong Kong court ordered the liquidation of the property giant this week, adding to worries about China’s economic prospects and raising questions about foreign investment in the country.
A lack of concrete measures from Beijing to address sharply slowing GDP growth is also dragging on investor sentiment, with hopes now hanging on big meetings of the Communist Party that are expected next month.
Uncertainty over China continues to weigh on stocks in Hong Kong and Shanghai, which fell once again Wednesday, wiping out a large chunk of last week’s gains.
And OANDA’s Kelvin Wong warned the outlook was not very rosy at the moment.
“Any potential upside cyclical factors such as lower interest rates, and a weaker US dollar may not be enough to trigger a medium-term bullish catalyst for China and the Hong Kong stock market,” he said in a note.
Seoul, Wellington, Bangkok and Taipei also fell, though Sydney, Singapore, Manila, Mumbai and Jakarta rose.
Tokyo rose, after reversing early losses that came as a summary of last week’s meeting showed Bank of Japan officials were edging towards tightening monetary policy as inflation picks up and the economy shows some life.
London, Paris and Frankfurt all opened higher. With AFP
