THE benchmark PSEi tracked the pattern of regional markets on Monday, breaking a seven-day rally, influenced by growth concerns over the global economy after the US Federal Reserve left interest rates unchanged.
The PSEi dropped 0.55 percent or 39.50 points at 7,092.41. The All Shares decreased by 0.53 percent or 21.74 points to 4,054.86.
Over 1.511 billion shares, valued at P6.844 billion, were traded. Decliners outnumbered advancers, 110 to 71, while 35 issues were unchanged.
“While it was a largely expected decision by the Fed, saying that adjusting rates rested on the weakness of the global economy did not ride well with the market,” Justino Calaycay Jr., equity analyst at Philstocks Financial Inc., said.
“By saying—or at least perceived to have said—that it held back because the global economy is still weak, questions on the resiliency of the growing strength of the US economy to withstand external headwinds emerged,” he added.
Calaycay cited investors factoring in the weakness in China’s economy and stock markets, saying that China is the “world’s second largest economy” and is undergoing transition to a debt-fueled and export driven economy to a slower and more sustainable one from consumption and services growth.
“From this vantage point alone, one can see the impact of a slowing demand from a weak economy,” Calaycay said.
He said China’s point of transition is worrisome for the Fed to cite this as one of the reasons why it didn’t raise rates.
Moving forward, Calaycay said investors will tune in to the Monetary Board meeting on Thursday as well as developments overseas.