Stocks fall on rate hike concerns and profit-taking

SHARES fell on Tuesday as the local market reopened after a bank holiday, with investors paring gains amid Wall Street’s decline over the past week on ongoing concerns over the Federal Reserve’s policy stance.

The Philippine Stock Exchange (PSEi) benchmark index fell 62.23 points, or 0.92%, to close at 6,690.27 on Tuesday, while the broader all-shares index fell 28.95 points, or 0.80%, to 3,548 .50 fell.

Philippine financial markets were shut down on Monday to commemorate National Heroes Day.

“Philippine stocks have declined amid growing concerns about rising interest rates and tighter US monetary policy affecting thebottleI mentioned Fed Chair Powell’s blunt statements at the recent Jackson Hole,” Luis A. Limlingan, director of sales at Regina Capital Development Corp., said in a Viber message.

“Investors took profit or sold positions due to the sell-off that took place in the US market last Friday,” Mercantile Securities Corp. Head Trader Jeonwards Radley C. See said in a Viber message.

Wall Street ended Friday down more than 3% after Fed Chair Jerome H. Powell’s speech on the second day of the Fed’s annual Jackson Hole symposium.

On Monday, the Dow Jones Industrial Average fell 184.41 points, or 0.57%, to 32,098.99; the S&P 500 lost 27.05 points, or 0.67%, to 4,030.61; and the Nasdaq Composite fell 124.04 points, or 1.02%, to 12,017.67.

Mr Powell said the US could see slower economic growth and a rise in unemployment as the central bank continues to hike Interest rates to combat rising inflation.

He said the Fed will raise rates as high as needed and leave them there “for some time” to lower thembottleation and increased bets for another 75 basis point (bp) hike at the September 20-21 Federal Reserve meeting.

The Fed has hiked rates 225 basis points since March so far, including consecutive hikes of 75 basis points in June and July.

At home, all industry indices ended in the red. Services fell 18.81 points, or 1.09%, to 1,703.68; Holdings declined 65.58 points, or 1.01%, to 6,425.39; fiFinancials declined 15.23 points, or 0.93%, to 1,621.55; Property fell 25.63 points, or 0.84%, to 2,995.54; Mining & Oil down 62.58 points or 0.53% to close at 11,752.30; and Industrials fell 51.85 points, or 0.52%, to 9,823.02.

There were more rejecters than promoters, 124 versus 58, while 51 names remained unchanged.

Value turnover fell to P5.98 billion on Tuesday, with 1.26 billion shares changing hands, from P8.82 billion with 1.26 billion issues on Friday.

Overseas net sales fell to P37.36 million on Tuesday from P85.79 million on Friday.

Mercantile Securities’ Mr See said the PSEi could retest the 6,750 resistance level after managing to close from a low of 6,600 in the 6,690 area. He estimated PSEi’s support at 6,400-6,600 and resistance at 6,700-6,900. — JID table