Index tumbles as cautious mood prevails

MANILA, Philippines - Share prices continued to drop as cautious trading prevailed ahead of the US Fed meeting next week, analysts said.

The benchmark Philippine Stock Exchange index (PSEI) declined another 85.59 points to finish at 6,735.01, while the broader All Shares index likewise ended below the 4,000 mark at 3,894.86.

All other indexes finished in negative territory except for the property index which managed to gain 16.59 points or 0.57 percent.

Jonathan Ravelas, BDO Chief Market Strategist said cautious trading prevailed ahead of the US Fed meeting next week. “The local bourse fell dangerously close to the 6,800 support levels this week as cautious trading prevailed ahead of the FOMC (Federal Open Market Committee) meeting next week. The prospects of an interest rate hike by the US Fed weighed on the market, with dampened investor sentiment triggering a sell-off,” Ravelas said.

He said the week’s breach of the 6,800 levels continue to highlight the bearish mode and sees a retest of the 6,500 levels in the near term.

The US Fed is widely expected to raise rates next week on improving US economy.

Astro del Castillo, managing director of First Grade Finance Inc. said there are also fresh concerns on possible slowdown in global growth.

“Weakness of yuan triggered fresh concerns on possible slowdown in global growth. Reports that our local economy had a slow start this quarter and government’s stance on contractual obligations continue to further shake confidence,” he said.