PSEi down due to Fed jitters

By: February 05,2018 - 10:13 PM

A GLOBAL equities bloodbath spilled over to the local stock market on Monday, as the stronger-than-expected US jobs data spawned concerns that the US Federal Reserve (Fed) may turn more hawkish to curb resurgent inflation.

The main-share Philippine Stock Exchange index (PSEi) lost 194.75 points or 2.21 percent to close at 8,616, marking its worst single-day performance in two years.

Only last week, the local stock barometer broke into new highs past 9,000.

Across global markets, stock markets tumbled as last Friday’s US payrolls report showed wages growing more than expected and at their fastest pace in more than 8.5 years, fuelling inflation expectations.

On Friday, the Dow Jones Industrial Index lost 665.75 points or 2.54 percent while the future markets suggested that the rout isn’t over.

“A strong US jobs report, including robust average hourly earnings, helped the (US) dollar snap a seven-week losing streak Friday. (US) Treasuries continued to struggle amid increasing market conviction that the Fed will keep on hiking rates,” said BDO Unibank chief strategist Jonathan Ravelas.

At the local market on Monday, all counters ended lower but the worst hit was the interest rate-sensitive property counter which fell by 3.14 percent.

This Thursday during its first monetary policy setting for the year, the Bangko Sentral ng Pilipinas (BSP) is seen to keep its key interest rates unchanged but investors are also bracing for a shift to a hawkish tone as a prelude to a rate hike in March.

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TAGS: down, FED, PSEi, to

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