PSEi falls below 8,000 level on rate hike fears

MANILA, Philippines — The stock barometer sank into a deeper market correction on Wednesday, after it closed below the 8,000 support level as jittery investors await the results of the Bangko Sentral ng Pilipinas and the US Federal Reserve’s respective monetary policy meetings.

 

The benchmark Philippine Stock Exchange index retreated to its lowest level since August 2017, plunging 1.87 percent or 150.53 points to 7,909.07.

The PSEi has sagged by 12.69 percent since hitting an all-time high of 9,058.62 on Jan. 29, 2018.

 

The broader All Shares index was also badly battered, dropping 1.23 percent or 59.43 points to 4,789.06.

 

“Despite the modest recovery from the US, the PSEi fell below 8,000... ahead of the widely expected first rate hike by new Fed chairman Jerome Powell,” Luis Limlingan of Regina Capital said in a market commentary.

 

On the flipside, other Asian stock markets advanced Wednesday ahead of the Federal Reserve's meeting. Japan's was closed for a holiday.

Limlingan said the BSP is expected to leave key rates unchanged in the face of rising inflation in its second policy-setting meeting for this year on Thursday.

 

“Our expectation is that the BSP will normalize policy by hiking policy rates, beginning May or June 2018,” he said.

 

The mining and oil counter kept its head above the water, climbing 1.81 percent or 189.59 points to 10,691.20, after Pangilinan-led PXP Energy helped prop up the sector ahead of talks between the Philippines and China on possible joint exploration.

 

The services counter also finished in green, while the rest were engulfed in a sea of red.

 

Decliners trumped advancers at 139 to 85, while 41 issues closed flat. Meanwhile, value turnover stood at P9.5 billion.