The stock market fell slightly Thursday on profit taking and the huge loss in Wall Street overnight after the US Fed increased interest rates again.
The Philippine Stock Exchange Index slipped 16.21 points, or 0.2 percent, to 7,563.41 on a value turnover of P5.9 billion. Gainers, however, beat losers, 117 to 78, with 42 issues unchanged.
Major property developer Ayala Land Inc. lost 2.7 percent to P42.05, while conglomerate San Miguel Corp. dropped 2 percent to P145.
But Leisure & Resorts World Corp. advanced 5 percent to P3.55, while Phinma Energy Corp. climbed 8.3 percent to P1.18.
Tokyo, meanwhile, led a rout of Asian shares Thursday, mirroring big losses on Wall Street after the Fed defied unprecedented pressure from Donald Trump and raised interest rates, sparking fears the move could choke economic growth.
The Nikkei plunged to a 15-month low as investors took fright over the pace of monetary tightening, with a slump triggered by the Dow’s fall to its lowest level of 2018 gathering pace.
The US Federal Reserve raised rates for the fourth time this year—as expected—but markets reacted badly after chairman Jerome Powell said the bank would not shift course on reducing its balance sheet.
Investors had hoped for a less aggressive approach amid concern that global growth is slowing, while Powell played down the impact of recent market turmoil on the US economy.
“They think the Fed has completely misjudged the situation and now it’s just a matter of… trying to find an exit while you can,” said Kyle Rodda, a market analyst at IG Group in Melbourne.
“We’re probably entering a stage now where markets have got it (in) their head that we’re preparing for quite sustained downside going into 2019.”
The Fed now projects only two interest rate increases, down from three previously, as it trimmed its forecast for US growth and inflation.
Stephen Innes, head of Asia-Pacific trade at OANDA, said the “Fed delivered a dovish hike, but clearly, there wasn’t enough affirmation in the statement that the Fed was close to pausing or ending their interest rate hike cycle sooner than expected.”
But some analysts urged caution.
“The market overreacted to the Fed, I think,” said Shane Oliver, head of investment strategy at AMP Capital Investors in Sydney.
“It is moving in a dovish direction and is on track for a pause in the first half of next year. Markets are being driven by fear rather than fundamentals.”
But the spillover from the rate hike continued to rattle investors in Asia Thursday, deepening concern over global growth prospects which are already facing headwinds from President Trump’s trade war with Beijing, a slowing Chinese economy, and potential turmoil from Britain quitting the European Union.
Japanese stocks also declined after the Bank of Japan left ultra-low rates unchanged, with the threat of trade protectionism and slowing global growth casting a pall over the export-driven economy. With AFP
