Share prices succumbed to profit-taking on Wednesday after new US Fed chief Jerome Powell fueled fears of sharp interest rate hikes.
The Philippine Stock Exchange index (PSEi) plunged by 1.36 percent or 117.09 points to 8,475.29 while the broader All Shares shed 0.70 percent or 35.79 points to 5,082.94.
“The PSEi was tracking the US sell-off following … Powell’s comments that spurred market speculations of possible faster rate hikes,” IB Gimenez Securities, Inc. research head Joylin Telagen said.
Powell, in his first appearance before Congress, indicated that the US central bank could increase interest rates faster than anticipated.
China Bank Securities Corp. Research Director Garie Ouano agreed that Powell’s testimony had spooked markets.
“Estimates were previously torn between two to three hikes and three to four, but Powell’s remarks last night could have tilted sentiment toward a faster pace,” he said.
Diversified Securities, Inc. equities trader Aniceto Pangan also noted a “hawkish stance with regards to interest rates adjustments … [that]caused the US market to correct, cascading to regional markets.”
Mining and oil and the industrial indices were the only domestic gainers on Wednesday, up 0.20 percent and 0.11 percent, respectively.
Volume turnover reached 16.9 billion shares valued at P9.97 billion.
Winners led losers, 111 to 96, while 52 issues remained unchanged.