US recession jitters weaken Asia marts
The downward trajectory, as pointed out by several analysts, was primarily influenced by the negative signals emanating from Wall Street over concerns of a recession in the United States.
Daily TribuneThe downward trajectory, as pointed out by several analysts, was primarily influenced by the negative signals emanating from Wall Street over concerns of a recession in the United States.
Trader ponders his move at the floor of the New York Stock Exchange. New economic data showed initial jobless claims rose the highest in a year and a manufacturing index that measures factory activity in the US came in worse than expected, causing renewed worries of a recession.
Jeenah Moon/Getty Images/Agence France-Presse
The Philippine Stock Exchange index (PSEi) declined 88.53 points, along with the weakening of markets across the region, resulting in a closing value of 6,605.30 and effectively reversing the gains of the previous two trading days.
The downward trajectory, as pointed out by several analysts, was primarily influenced by the negative signals emanating from Wall Street over concerns of a recession in the United States.
In a text message, Philstocks Financial Inc. assistant manager for Research and Online Engagement Claire Alviar said investors were worried that the Federal Reserve might now be late in easing monetary policy.
She added that the delay could potentially lead to recession given some dismal economic data in the US.
“Back at home, the Philippines’ S&P Global Manufacturing Purchasing Managers Index in July still registered an expansion at 51.2. However, it was slightly lower than the previous month’s 51.3,” Alviar also noted.
Rate cut still in cards
According to Michael Ricafort, chief economist of Rizal Commercial Banking Corporation, the dovish signals from the Bangko Sentral ng Pilipinas regarding a potential 25 basis points rate cut this August and the easing of global commodity prices may counteract higher inflation projections that could impact the performance of the local stock market.
Meanwhile, Luis Limlingan, head of Sales at Regina Capital Development Corp., said that traders should shift focus on July’s nonfarm payrolls — a key catalyst for stocks.
“Economists polled by Dow Jones expect an increase of 185,000 jobs, down from June’s 206,000. The unemployment rate is projected to hold steady at 4.1 percent, a crucial metric for traders assessing recession risks. Additionally, factory orders are set to be reported on Friday morning,” he said.
Yesterday, all sectors experienced losses, with Services suffering the most, declining by 1.97 percent. Banks followed, dropping by 1.67 percent.
Among the index members, only six stocks gained during this session, led by Globe Telecom Inc., which rose by 2.59 percent. ACEN Corp., on the other hand, experienced the most significant decline, plunging by 5.10 percent.
The value turnover net of extraordinary transactions remained low at P4.582 billion, with decliners outnumbering gainers 112 to 59, while 53 stocks remained unchanged.
