Stocks rise on bargain hunting; peso slips

PSEi August

By Jenniffer B. Austria

PHILIPPINE stocks slightly rose Tuesday on last-minute bargain hunting to end three straight days of decline, but the peso extended its losses on crude price concerns.

The composite Philippine Stock Exchange index inched up by 6.72 points, or 0.11 percent, to close at 6,335.91, while the broader all-shares index rose 2.98 points to settle at 3,400.87.

“The market was marginally higher amidst cautious bargain hunting after China announced a surprise cut to a key policy rate in an attempt to boost its flagging economy,” China Bank Capital managing director

Juan Paolo Colet said. Colet said, however, the index remained shaky as investors were concerned about the disappointing macroeconomic data from China and the rising US yields. The peso finished lower at 56.84 against the US dollar Tuesday, compared to 56.78 Monday as investors raised concern over rising crude prices that could jack up imports again.

Meanwhile, Asian markets were mixed as a US tech rally buoyed sentiment while a batch of disappointing data from China stoked concerns over the state of the world’s second-largest economy.

Gains by large tech companies including Amazon, Google parent Alphabet and Meta Platforms lifted the Nasdaq by more than one percent at the close Monday. The sentiment initially carried through to Asia with Tokyo climbing 0.6 percent, boosted by a surge in tech firms and data showing the Japanese economy grew

1.5 percent in the quarter to June thanks to robust exports on the back of a weaker yen.

Sydney, Taipei and Kuala Lumpur were also in the green but other markets gave up early gains, with Singapore, Bangkok and Wellington lower while Jakarta was flat.

Seoul and Mumbai were closed for holidays.

Hong Kong closed down 1.0 percent and Shanghai was off 0.1 percent as a fresh batch of weak figures from Beijing failed to reassure investor concerns about the stuttering Chinese economy.

European markets fell in early trade, with London down 1.1 percent as Britain reported an increase in unemployment while Frankfurt was off 0.7 percent and Paris was 0.8 percent lower.

Chinese data released Tuesday showed slowing growth in July retail sales while industrial production fell short of analyst expectations. With AFP

Japan’s economy grew 1.5% in Q2, beats expectations

TOKYO, Japan—Quarterly growth data for Japan smashed expectations on Tuesday as car exports rebounded and tourists flooded back, but economists cautioned that it may not last.

The world’s third-largest economy expanded 1.5 percent quarter-onquarter in the three months to June, preliminary government data showed, the fastest rate since the fourth quarter of 2020.

This was almost double the average economist forecast of 0.8 percent, according to Bloomberg News, and followed revised growth of 0.9 percent in the previous quarter.

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China logs weaker than expected July retail sales growth

BEIJING—China on Tuesday released weaker than expected economic data, with slowing retail sales growth pointing to shaky consumer confidence in the world’s second-largest economy.

A slew of disappointing figures in recent months has reflected a slump as China’s post-Covid rebound fades.

Retail sales, a key gauge of consumption, grew 2.5 percent yearon-year in July, the National Bureau of Statistics said on Tuesday, down from 3.1 percent in June and falling short of analyst expectations.

Chinese leaders have sought to boost domestic consumption in recent weeks, with the State Council last month releasing a 20-point plan to encourage citizens to spend more in sectors including vehicles, tourism and home appliances.

Officials cut the medium-term lending facility (MLF) rate—the interest for one-year loans to financial institutions—from 2.65 percent to 2.5 percent.

A lower MLF rate reduces commercial banks’ financing costs, in turn encouraging them to lend more and potentially boosting domestic consumption.

The country’s top leaders, known as the Politburo, have warned that the economy faces “new difficulties and challenges” as well as “hidden dangers in key areas”.

Overall, unemployment rose to 5.3 percent in July compared to 5.2 percent in June, the NBS said, without giving a specific figure for youth unemployment, which hit a record high in June.

The NBS said industrial production grew 3.7 percent in July from a year ago, down from 4.4 percent in June.

The recent data suggests that China may struggle to achieve a five percent growth target set for the year.

The world’s second-largest economy only grew 0.8 percent between the first and second quarters of 2023, according to official figures.

Many economists are now calling for a vast recovery plan to boost activity. AFP