Fed’s stance vs inflation sobering for PH investors
The hawkish signal from the Federal Reserve may induce profit-taking this week at the local bourse, which recently saw a three-day rally.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC), said investors might sell off their positions in response to the recent speech made by Fed chair Jerome Powell at a symposium in Jackson Hole, Wyoming.
“The new hawkish signals by Fed Chair Powell during the Fed’s yearly Jackson Hole symposium led to the latest overnight declines in US stock markets by at least 3 percent (the biggest daily declines since June 13, 2022) to new lows in nearly a month,” he said.
Ricafort said this could, in turn, affect global financial markets, including the Philippine Stock Exchange (PSE), this week.
He pegged the immediate support between 6,500 and 6,600.
The RCBC economist said better corporate earnings reports have generally “supported market sentiment and overall valuations in recent weeks, especially for most of August.”
The market is closed today as the country observes National Heroes Day.
The benchmark PSE index ended Friday higher by 0.69 percent, or 46.07 points, to close at 6,752.50 while the wider All Shares index rose by 0.34 percent, or 12.17 points, to settle at 3,577.45.
The rally that started on Wednesday, however, failed to offset big losses early in the week. Against the previous week, the benchmark was lower by 1.6 percent. INQ
