Asian markets tumble on rate concerns; Philippines closes flat
![Asian markets tumble on rate concerns; Philippines closes flat](https://media.philstar.com/photos/2023/10/03/7_2023-10-03_19-12-09.jpg)
MANILA, Philippines — Most Asian stocks tumbled yesterday on concerns over interest rates following hawkish comments by a senior US Federal Reserve official indicating the central bank was likely to keep them higher for longer.
US inflation remains stubbornly above the Federal Reserve’s long-term target of two percent despite falling sharply over the past 12 months, leading most Fed officials to predict last month that another hike is needed this year.
Hong Kong led the equities decline in Asia, falling nearly 2.7 percent as the market reopened following a holiday weekend.
Tokyo ended down 1.6 percent while Sydney, Taipei, Bangkok and Singapore were also well in the red. Manila and Kuala Lumpur were flat, with Jakarta the sole advancer.
The benchmark Philippine Stock Exchange index closed nearly unchanged yesterday, inching up by 1.46 points or 0.02 percent to settle at 6,305.99. The broader All Shares index gained by 6.50 points or 0.19 percent to finish at 3,405.62.
The sectoral gauges were mixed with mining and oil, industrial and services ending in positive territory while holding firms, financials and property slipped into the negative zone.
Total value turnover reached P5.9 billion. Market breadth was negative with 103 losers and 94 gainers while 50 issues were unchanged.
Unicapital Securities said local investors are waiting for the September inflation report due on Thursday and which is expected to rise faster at a range of 5.3 percent to 6.1 percent compared to August’s 5.3 percent.
Meanwhile, Federal Reserve vice chair for Supervision Michael Barr told a conference in New York on Monday that he expected rates would need to remain at a “sufficiently restrictive level” for “some time” to rein in inflation.
Barr’s comments echo the views of the majority of his colleagues who recently lowered the number of rate cuts they expect in 2024, suggesting a longer period of high rates.
The Fed has raised its key lending rate 11 times since March 2022, lifting to a 22-year high.
With inflation well above its target, “the Fed is gonna keep rates high and we are expecting higher rates for longer”, Xi Qiao, managing director for wealth management at UBS, told Bloomberg Television.
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