Index retreats on possible Federal rate hike

MANILA, Philippines - The stock market tumbled for the second straight session yesterday as prospects of a US Federal Reserve rate hike by December sapped investors’ appetite for risk.

The Philippine Stock Exchange index lost 78.57 points, or 1.09 percent, to close at 7,122.45.

Expectations of a US Fed rate hike by December were triggered by strong US data and recent  comments from a US Fed official.

US Fed chairman Janet Yellen told the House Financial Services Committee Wednesday morning a rise in interest rates before the end of the year was “a live possibility” with the US economy continuing to perform well.  She said “it could be appropriate” to raise rates at the Fed’s final policy meeting of the year in mid-December but stressed that no decision has been made.

At the local stock market, all counters, except the financial sector, ended in the red led by services, property, and holding firms.

Total value turnover amounted to P6.52 billion with about 843.61 million shares changing hands. There were 48 advancers which were overwhelmed by 124 decliners while 44 stocks were unchanged.

Among the notable decliners were  BDO, Universal Robina Corp., Philippine Long Distance Telephone Co., Ayala Land, and ICTI.

Accord Capital’s Jun Calaycay said the nine-month results of some companies provided some optimism, albeit still cautious.