Stocks plunge as investors turn cautious over GDP

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Philippine stocks wrapped up the week in the red as investors turned cautious about the slower first-quarter economic growth rate largely due to prevailing high inflation and interest rates.

“Given the dismal data, many investors opted to remain on the sidelines as market participation weakened with net turnover registering P3.37 billion,” Alviar said. The forecast-beating figures showing that unemployment claims rose to their highest level since August followed last Friday’s news that far fewer new posts were created in April than expected.The readings soothed worries that borrowing costs would remain elevated through the year after a series of above-estimate inflation readings in the first four months.

“The data is noisy and thus we cannot yet say that a change in trend has occurred, but the next few weeks are going to be important, further increases from here would encourage the market to price a new Fed easing cycle with more confidence,” said National Australia Bank’s Rodrigo Catril. And with Wall Street enjoying a strong day, Asian investors went into Friday on a high — as did European investors.

 

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