Index snaps 6-day runup as investors take profits

Share prices succumbed to profit-taking yesterday as investors cashed in on gains from the market’s six-day runup, with overall sentiment still weighed down by concerns over the US Federal Reserve’s hawkish interest rate stance.

The bellwether Philippine Stock Exchange index (PSEi) tumbled to close at 6,609.27, down by 102.22 points or 1.52 percent, as the government also reported an increase in the unemployment rate to 4.8 percent in January from 4.3 percent the previous month.

Likewise, the broader All Shares index slipped to 3,549.19, down by 36.47 points or 1.02 percent.

“The local market inched down as the rise in unemployment rate to 4.8 percent in January weighed on investor sentiment. In addition, the rise of non-performing loans in the country in the first in 10 months also dampened sentiment. These data added to the lingering inflation and interest rate concerns in the economy,” said Mikhail Plopenio of Philstocks Financial.

Market participation was weak as net value turnover stood at only P4.89 billion, below its year-to-date average of P6.46 billion, he said.

Foreigners were net sellers with outflows amounting to P438.27 million yesterday.

Around Asia, shares wobbled after a spate of economic data overnight appeared to support Fed Chairman Jerome Powell’s hawkish guidance on further interest rate increases.

In his second day on Capitol Hill, Powell stuck to his message of higher and potentially faster interest rate hikes, but emphasized that debate was still underway with a decision hinging on data to be issued before the US central bank’s policy meeting in two weeks.

In the US, data released overnight painted a picture of a sturdy economy, doing little to assuage fears the Fed will ease up on its relentless rate hikes.

Job openings remain elevated, private payrolls beat consensus estimates and demand for home loans increased despite higher mortgage rates.

“It’s hard to see this as clarifying the employment picture ahead of tomorrow’s payrolls release, which remains a lottery,” said Robert Carnell, regional head of research, Asia Pacific at ING.