Index eases as market turns cautious

MANILA, Philippines -  Shares prices took a downturn yesterday as investors remain cautious ahead of the US Fed rate decision.

The benchmark Philippine Stock Exchange Index (PSEi) closed 0.11 percent, or 7.96 points, lower at 7,253.79, while the wider All Shares Index dropped 0.21 percent or 9.51.

Regina Capital Development Corp. Business Development head Luis Limlingan said share prices declined as investors awaited the decision of the Federal Open Market Committee.

“The local market sold modestly ahead of the FOMC outcome as they waited for the final release of the Fed’s decision,” Limlingan said.

“Most analysts expect the FOMC to raise the target range for the funds rate by 25 basis points at the March meeting,” Limlingan said.

IB Gimenez Securities Inc. research analyst Joylin Telagen said a faster rate hike could result in market volatility.

“Investors priced in three rate hikes this year but if the tone of Fed changed to faster rate hike, we might expect market volatility,” Telagen said.

However, the analyst noted of the optimism of investors.

“But I think investors are looking forward to Fed chair press conference regarding their normalization path this year, which I think will determine market direction whether to break 7,300 or move towards 7100,” Telagen said.

Most sectoral indices posted declines, with only financials and services registering increases. The services index gained the most as it climbed 0.17 percent or 2.59 points to 1,476.67.

Mining and oil was the biggest loser as it dropped 1.09 percent to 11,996.92.