Bourse joins global retreat in face of Fed signals

LOCAL EQUITIES yesterday sounded a retreat with counterparts across the globe as the US Federal Reserve on Wednesday raised interest rates and signaled a faster pace of increases on the cards next year.

The Philippine Stock Exchange (PSE) index gave up 73.03 points or 1.05% to finish 6,855.31, while the all- shares index lost 40.02 points or 0.95% to end 4,161.35.

All six sectoral indices ended lower: property sank by 71.16 points or 2.29% to 3,041.51; industrial firms gave up 131.44 points or 1.21% to 10,748.72; mining and oil ceded 117.40 points or 0.96% to 12,103.01; services went down 6.92 points or 0.54% to 1,281.89; financials lost 7.42 or 0.44% to 1,677.57, while holding firms shed 25.68 points or 0.36% to 7,037.96.

“Phil[ippine] stocks declined as US stocks retreated after the Fed indicated a faster pace of rate increases for 2017. The Dow backed away from the so far yet-to-be-met magical 20K level after the [US] central [ bank] announced just the second interest rate increase in a decade” Luis A. Limlingan, managing director at Regina Capital Development Corp., said in a mobile message.

The Fed raised interest rates by a quarter of a point at the end of its final two-day meeting for 2016 — the first increase in a year and the second in nearly a decade, as expected — but then signaled that uncertainty over economic policy under president- elect Donald J. Trump, who takes office next month, could lead to three hikes next year instead of the two foreseen in September.

The Dow Jones industrial average, the S&P 500 and the Nasdaq Composite dropped by 0.60%, 0.81% and 0.50%, respectively.

While the Nikkei 225 and MSCI AC Asia Pacific edged up by a nearly flat 0.10% and 0.07%, respectively; the Hang Seng, Shanghai Shenzhen CSI 300 and S&P/ASX 200 indices shed 1.77%, 1.14% and 0.82%, respectively.

Victor F. Felix, equity analyst at AB Capital Securities, Inc., said that markets may continue their downward trend in the face of the Fed’s hawkish tone on interest hikes next year. “I think we’re already pricing in a rate hike,” said Mr. Felix in a phone interview.

Losers dominated advancers 117 to 66, while 40 issues were unchanged. The PSE marked its fifth straight trading day of net foreign selling, which surged 20-fold to P1.78 billion from Wednesday’s P87.40 million.

Top- traded stocks that lost were led by BDO Unibank, Inc. that dropped P2.50 — or -2.19% — to P111.40 each; SM Prime Holdings, Inc., 85 centavos or -2.95% to P27.95; Universal Robina Corp., P2.80 or -1.74 to P158.10; Ayala Land, Inc., 60 centavos or -1.85% to P31.75; Metropolitan Bank & Trust Co., 35 centavos or -0.47% to P73.95; and PLDT, Inc., P21 — some -1.57% — to P1,318.

Those that gained were led by Shakey’s Pizza Asia Ventures, Inc., that added 84 centavos or 7.46% to P12.10 apiece; Ayala Corp., P12.50 or 1.74% to P732; Bank of the Philippine Islands, 50 centavos or 0.56% to P89.50; and SM Investments Corp., P1 or 0.15% to end P651 each. —