MANILA, Philippines - Share prices continued to retreat yesterday as investors turned cautious following reports of a possible US Fed rate increase in December.
The Philippine Stock Exchange index (PSEi) declined 54.99 points, or 0.76 percent, to finish at 7,134.26, while the broader All Shares index declined 24.11 points or 0.58 percent, closing at 4,119.28.
All other indices stayed in negative territory with the mining and oil and the holding firms barometers showing the biggest decline.
Value turnover reached P8.11 billion, with decliners staying ahead of advancers, 101 to 62 while 49 stocks were left unchanged.
“Local equities retreated as the Fed made a direct reference in its statement to its December meeting to determine whether a rate hike would be appropriate, a departure from its cautious stand in its previous statement. Note that Fed officials have repeatedly emphasized their dependence on data, in this case inflation and labor data for October and November,” said Jason Escartin of F. Yap Securities.
More and more investors believe the US Federal Reserve will raise its benchmark interest rate from a record low in December.
Market strategist Bernard Aw at IG in Singapore said the third quarter US economic growth is unlikely to be an excuse for the Fed to hold off a rate hike.
He said as long as the jobs data resumes a strong upward trajectory, alongside improvement in the inflation numbers, the case for a December liftoff remains alive.