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Business

Index eases on imminent Fed rate hike

Iris Gonzales - The Philippine Star

MANILA, Philippines - Share prices tumbled yesterday as investors turned cautious following reports of a better-than-expected US jobs data which bolstered expectations of an imminent Federal Reserve interest hike.

The benchmark Philippine Stock Exchange index (PSEi) declined 48.01 points, or  0.67 percent, while the broader All Shares index shed 24.40 points or, 0.59 percent, to end at 4,097.07.

Value turnover reached P3.73 billion. Decliners outnumbered advancers, 137 to 50.

Analysts attributed the market’s lackluster performance to rising possibility the US Federal Reserve may raise interest rates in December following the release of better-than-expected October jobs data.

According to reports, the US economy created 271,000 jobs in October, significantly higher than the 185,000 jobs that economists had forecast.

Analysts said the strong number raised expectations the US Federal Reserve will raise interest rates at its policy meeting in December.

Earlier, US Federal Reserve chairman Janet Yellen said the rise in US interest rates in December was “a live possibility.”

The Fed has cut rates to near-zero in December 2008 in response to the gathering financial crisis and has since left investors guessing on when the next rate hike would be.

Aside from rosy jobs data, the US economy also noted a strong rise in wages last month. Specifically, the average hourly earnings rose nine cents to $25.50 or 2.5 percent higher from a year earlier.

ACIRC

ALL SHARES

DATA

FEDERAL

FEDERAL RESERVE

INTEREST

JANET YELLEN

JOBS

PHILIPPINE STOCK EXCHANGE

RATES

RESERVE

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