PH shares rise as investors cheer lower budget deficit

PHILIPPINE shares edged higher on Wednesday as the index went up by 8.64 points to close at 6,511.49 despite strong selling pressures.

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Philstocks Financial Inc. research and engagement officer Mikhail Plopenio said investors cheered the narrowed budget deficit of the national government.

Plopenio said the market opened strong as the index reached an intra-day high of 6,559.25.

However, selling pressures increased during the afternoon trading session which trimmed gains.

Value turnover reached P6.78 billion with 1.06 billion shares changing hands. Decliners outnumbered advancers, 94 versus 79, while 51 stocks were unchanged.

Meanwhile, equity markets were mixed Thursday as central bank warnings that interest rates would rise further to counter inflation played up against hopes the US economy could avoid a recession.

Worries over the outlook for China also continue to weigh on sentiment in Hong Kong and Shanghai after mainland officials failed to provide any details on plans to boost growth, despite pledges of help.

Investors were also keeping an eye on Tokyo as the yen weakened to a fresh seven-month low against the dollar as Japanese and US monetary policies diverge.

With the weekend crisis in Russia appearing to have ebbed, focus is now back on efforts by the Federal Reserve and other central banks aimed at fighting inflation.

On Wednesday, Fed boss Jerome Powell said officials were leaving the door open to two more hikes, having paused at their July gathering for the first time since kicking of their campaign early last year.

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“Policy hasn’t been restrictive enough for long enough,” he told an annual gathering of central bankers in Sintra, Portugal.

“We believe there’s more restriction coming.” He added policymakers had not decided whether to go for two successive increases or at alternate meetings and warned rates could stay high for some time as the board tries to cut inflation to their two percent target from the current four percent.

“We will be restrictive as long as we need to be,” he said.

Investors will be watching the release later Thursday of the personal consumption expenditures (PCE) index— the central bank’s preferred measure of inflation—with a strong reading adding pressure to lif rates next month.Powell’s comments came after European Central Bank chief Christine Lagarde said eurozone borrowing costs would continue to rise. Jenniffer B. Austria with AFP