PSEi hits lowest in 6 months on US election, Fed rate hike fears
The local stock barometer slid to the 7,200 mark Wednesday, hitting its lowest in six months, as global investors shunned equities ahead of the US Federal Reserve’s interest policy pronouncement alongside escalating jitters over the hotly contested US presidential elections.
Declining for the 8th straight session, the Philippine Stock Exchange index (PSEi) lost 152.40 points or 2.06 percent to close at 7,252.40. By percentage decline, the PSEi was the most battered among Asian stock barometers.
The closing level Wednesday marked the PSEi’s lowest since May 10, the day after the Philippines conducted its presidential elections.
All counters were in the red but the most battered was the financial counter, which tumbled 3.24 percent. The industrial, holding firm, services and property counters slipped by more than 1 percent.
BPI Securities president Michaelangelo Oyson said investors were on a “risk-off” mode amid uncertainties on the US elections and lack of fresh local corporate news. However, he noted that “interesting valuations (were) emerging.”
Foreign investors were net sellers, resulting in P1.47 billion in net foreign outflows for the day.
Overnight, the Dow Jones industrial index fell by 105.32 points or 0.58 percent on a mix of US Fed and election jitters, setting a bearish tone across Asian markets. Hong Kong’s Hang Seng index shed 336.57 points or 1.45 percent while Japan’s Nikkei 225 shed 307.72 points or 1.76 percent. Taiwan’s main index fell by 133.66 points or 1.44 percent.
“Markets are grappling with several sources of uncertainty. US equities weakened overnight as the presidential election odds tightened further. This has muddied the outlook for the Fed (US Federal Reserve). The consensus likely had anticipated that tonight (Nov. 2) the FOMC (Federal Open Market Committee) will signal a December hike by adding language to the statement regarding raising rates ‘at the next meeting,” Citigroup said in a research note Wednesday.
