September 21, 2023 | 12:00am
MANILA, Philippines — Stocks slipped below the 6,000 level in mid-session yesterday but managed to recover at the close as investors picked up bargains, yet the main index mirrored the cautious sentiment around Asia as the highly anticipated meeting of the US Federal Reserve nears.
The benchmark Philippine Stock Exchange index (PSEi) fell to 6,041.04, down by 6.93 points or 0.11 percent, while the broader All Shares index ended at 3,271.66, down by 2.64 points or 0.08 percent.
Total value turnover reached P5.3 billion. Market breadth was positive, 100 to 79, while 43 issues were unchanged.
April Tan, head of research at COL Financial, said headwinds continue to press on, which include rising 10-year bond rates, strong dollar and spiking oil prices.
“Longer than expected headwinds such as advances in the US 10-year bond yield and the greenback, and even oil, provide more reason for markets to stay on the defensive,” she said.
Claire Alviar of Philstocks Financial added that the market has now been down for four consecutive days following negative sentiment from Wall Street ahead of the Fed’s interest rate decision.
“The Philippine benchmark index slid along with most Asian markets as investors focused on the Fed policy meeting. The US central bank is expected to keep its key rate unchanged, leaving the possibility of a November rate hike,” First Metro Securities said in a note.
“(Today) investors will shift their attention to the BSP policy meeting which is highly anticipated to do a ‘rate-pause’ as well.”
Concerns that the Fed will have to lift interest rates again or keep them at a 22-year high for an extended period weighed on sentiment as traders awaited the US central bank’s latest policy decision.
While inflation has dropped from the eye-watering levels seen in the middle of last year, thanks to a long-running campaign on monetary tightening, a fresh spike in oil prices has caused a headache for officials as they try to bring prices under control.
The optimism that the Fed will be able to cut borrowing costs next year has evaporated over the summer as the US economy shows few signs of weakness and the labor market remains robust.
That has weighed on risk assets as traders contemplate a drawn-out period of high rates with tech firms, which rely on borrowing to fuel growth, among the hardest hit.