PSEi retreats on US Fed decision

MANILA, Philippines - The Philippine stock market took a nosedive yesterday following the Federal Reserve’s decision to leave interest rates unchanged.

The Philippine Stock Exchange index (PSEi) fell 0.93 percent, or 75.50 points, to close at 8,024.98, while the broader All Share index ended 0.66 percent or 32.03 points lower at 4,790.67.

“At the end of its two-day meeting, the FOMC (Federal Open Market Committee) said that near-term risks to the US economy had diminished, a view that could open the door to a resumption of monetary policy tightening this year. The Fed had not been expected to boost rates but investors sought clues for when a move might occur as uncertainty is high after the Brexit vote,” DA Market Securities said.

Local counters were mixed but favored mostly those in the red. Property firms and holding companies took the largest drop for the day at 1.75 percent and 1.11 percent, respectively.

Mining/oil companies and financial firms were the only ones closing in the positive territory, posting gains of 0.34 percent and 0.11 percent, respectively.

Despite a slightly higher value turnover at P10.14 billion, market breadth stayed negative as decliners thumped advancer, 121 to 70.

Analysts, however, remain optimistic the local market’s uptrend will resume in the coming days given how it has managed to stay above the 8,000 level in recent days amid profit taking scares.