PHILIPPINE SHARES fell as low as 6,300 on Thursday to a more than five-month low amid a global sell-off after the US Federal Reserve signaled a few rate cuts earlier on inflation concerns.
The Philippine Stock Exchange (PSEi) index fell 1.13% or 73.48 points to close at 6,395.60, while the broader all-share index fell 0.76% or 28.25 points to 3,671.75.
Thursday’s close was the PSEi’s worst close in more than five months or since it closed at 6,358.96 on July 2.
This was also lower than its 2023 close of 6,450.04.
“The local market took cues from the decline of Wall Street, driven by the Federal Reserve’s decision to cut rates next year,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in Viber’s message.
“Philippines stocks continued to fall following the Federal Reserve’s rate cut decision… Meanwhile, US stocks fell on Wednesday, recording losses as the Fed said it will taper slightly in 2025, pushing Treasury yields higher while pulling stocks,” Regina Capital Development Corp. . Head of Sales Luis A. Limlingan said in a Viber message.
The U.S. central bank cut interest rates on Wednesday, as expected, but Federal Reserve Chairman Jerome H. Powell said further reductions in borrowing costs now depended on progress in reducing stubborn inflation, words that signaled policymakers were beginning to think about prospects. with sweeping economic reforms under the Trump administration.
References of Mr. Powell’s clear – and repeated – need for caution from here on Wall Street combined, sending stocks sharply lower, bond yields higher and leading investors to dial back estimates of how much borrowing costs could fall in the coming year.
Rates will drop again if inflation shows significant improvement, with “the extent and timing of further adjustments to the target range” depending on “incoming data, the changing outlook, and the balance of risks,” the Fed said in the new language. that sets a temporary pause in rate cuts from the Jan meeting. 28-29.
US bankers now plan to cut rates by just one quarter of a percentage point by the end of 2025.
All industrial indices are closed on Thursday. Mining and oil fell by 2.36% or 175.72 points to 7,248.76; the commodity sank by 1.68% or 39.77 points to 2,323.83; industrials fell 1.36% or 122.35 points to 8,838.82; holding companies fell 1.35% or 75.20 points to 5,496.44; services decreased by 0.69% or 14.43 points to 2,052.48; and funds were down 0.32% or 7.01 points to 2,178.36.
The turnover rose to P6.03 billion on Thursday with 595.34 million shares traded. P5.96 billion and 1.39 billion issues were exchanged on Wednesday.
Those who declined outnumbered those who improved, 126 compared to 72, while 41 names were unchanged.
Total exports rose to P997.59 million on Thursday from P487.26 million on Wednesday. – RMD Ochave with Reuters
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