Stocks fall on trading data, Fed rate hike fears


STOCKS fell Tuesday after data was released showing the country’s trade deficit widened and expectations of a Fed rate hike rising.

The leading Philippine Stock Exchange Index (PSEi) lost 54.98 points, or 0.77%, to close at 7,085.69, while the broader all-shares index fell 24.42 points, or 0.64%, to 3,775.46.

“The market fell today after the record-high Philippine trade deficit data in November 2021, with imports also posting a new record high as the economy rebounded towards normal during the month,” said Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp said in a Viber message on Tuesday.

The country’s trade deficit rose to $ 4.71 billion in November 2021.

“Trade closed weaker ahead of the release of key US inflation data released on Wednesday and central bank news that may provide information on the future of monetary policy,” said Luis A., head of sales for Regina Capital Development Corp., said Limlingan in a Viber message.

Asian stocks and the dollar struggled to find direction on Tuesday as investors waited for Fed chief Jerome Powell to appear before the Senate Banking Committee in hopes of clues as to when the expected monetary tightening would be expected, Reuters reported .

MSCI’s broadest index for Asia Pacific stocks outside of Japan rose 0.2% after falling 0.3%.

US consumer inflation data for December comes out Wednesday, with the headline numbers hovering 7% year over year, suggesting that interest rates will rise sooner rather than later.

In December, the Fed announced plans to tighten monetary policy faster than expected in response, with a rate hike perhaps as early as March.

Fears of rising coronavirus cases in the country also impacted trading on Tuesday, said Cristina S. Ulang, director of research at First Metro Investment Corp ..

The health department registered 28,007 new coronavirus cases on Tuesday, bringing the number of active infections to 181,016.

All industry indices closed in the red. Mining and Oil declined 132.43 points, or 1.37%, to 9,536.39; Ownership decreased 40.79 points, or 1.29%, to 3,113.34; Industrials fell 91.65 points, or 0.89%, to 10,190.16; Holding companies fell 37.72 points, or 0.54%, to 6,906.40; Services fell 8.60 points, or 0.43%, to 1,949.29; and Financials lost 6.02 points, or 0.37%, to close at 1,619.71.

Turnover rose to 6.91 billion pesos with 877.97 million issues traded on Tuesday, up from 5.25 billion pesos with 745.53 million shares that changed hands the previous day.

Rejectors beat the advanced, 105 against 82, with 43 names closed unchanged.

Net overseas sales jumped from 118.04 million pence recorded after trading on Monday to 733.34 million pence. – MC Lucenio With Reuters

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