Strong Q2 growth fires up trade
Despite falling on the lower end of the range, most of the headwinds were caused by global inflationary pressures, and importation costs
Market activity was supported by the release of the second quarter gross domestic product (GDP), which showed the economy continuing to withstand the global turmoil, with the latest print at 7.4 percent.
The Philippine Stock Exchange index closed at 6,468.97, up by 34.73 points on turnover of P5.25 billion.
Despite falling on the lower end of the range, most of the headwinds were caused by global inflationary pressures, and importation costs, Regina Capital Development Corp. managing director Luis Limlingan said.
Private consumption remained robust at 8.6 percent, and may have been higher if not for higher fuel prices, while government consumption also picked up at 11.1 percent vs 3.6 percent in the first quarter.
The local market also received a boost as traders assessed the outlook for rate hikes.
Investors were also trying to look for some clarity from the US Federal Reserves as to how it’s going to pace the rate hikes once the July consumer price index is released.
Regional equities mostly rose but investors moved cautiously ahead of US inflation data later in the week, after a jobs report suggested the Federal Reserve would likely need to continue its sharp interest rate hikes to tame runaway prices.
A rally across global markets from June lows appeared to have hit the buffers after Friday’s forecast-busting employment reading showed the world’s top economy remained resilient but it meant more monetary tightening was on the cards.
There had been a hope that recent weak data, including one showing the economy contracted for two straight quarters, would allow the bank to take its foot off the pedal in lifting borrowing costs, and possibly begin cutting in 2023.
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