Market falls amid worries over rate cuts, China growth

Share prices ended in the red for a third session after another dour day across global markets, fuelled by a sense of resignation that the interest rate cuts long expected in March will not materialize due to stubbornly high inflation.

The main Philippine Stock Exchange index finished at 6,510.87, down by 61.64 points or 0.94 percent. Likewise, the broader All Shares index slipped to 3,451.21, down by 25.45 points or 0.73 percent.

Total value turnover was P5.3 billion. Market breadth was negative, 112 to 66, while 51 issues were unchanged.

Mikhail Plopenio of Philstocks Financial said investors seemed to have weighed negative factors offshore.

“Firstly, it tracked losses from Wall Street overnight amid rising US long term Treasury yields. The stronger-than-expected US retail sales data, which rose 0.6 percent, tempered near-term rate cut hopes by the Federal Reserve.

“Additionally, worries over

China’s economy dampened sentiment a day after it reported a dismal economic growth.”

Investors, he added, are also monitoring tension in the Red Sea as disruptions could arise if tension escalates.

A lack of meaningful measures by Beijing to boost China’s economy was adding to the frustration, with growth for the world’s second-largest economy in 2023 coming in at its slowest rate in more than three decades, excluding the pandemic years.

While in line with forecasts, the 5.2 percent expansion was the worst since 1990 – outside the COVID years – and ramped up calls for authorities to provide a much-needed shot in the arm to the torpid economy, particularly the shattered property sector.

All three main indexes on Wall Street ended in the red after data showed US retail sales smashed forecasts in December as consumers brushed off higher borrowing costs.

The figures followed surprisingly high readings this month on consumer prices and jobs creation, as well as minutes from the Federal Reserve’s most recent meeting that showed officials were keen to keep rates elevated for some time to contain inflation.