PSEi tumbles as Fed quashes rate cut hopes

Local stocks retreated yesterday as investors took cues from Wall Street’s overnight performance.

The Philippine Stock Exchange in- dex fell by 0.35 percent or 23.43 points to close at 6,623.01. The broader All Shares index followed suit as it settled at 3,486.03, down by 0.38 percent or 13.46 points.

“The local market dropped due to negative spillovers from Wall Street overnight as the US Federal Reserve, in its first meeting for the year, tempered rate cut hopes for March,” Philstocks Financial research and engagement officer Mikhail Plopenio said.

“With the current path of inflation in the US, Fed Chair Jerome Powell stated that the committee is not yet confident to cut rates in their next meeting,” he also said.

Plopenio said net market value turnover stood at P3.64 billion, lower than the year-to-date average of P4.45 billion.

Foreigners ended up as net buyers with net inflows amounting to P460.42 million.

Local counters were covered mostly in the red, led by mining and oil which plunged by 1.46 percent.

Financials, meanwhile, was the only index in the positive territory, managing to inch up by 0.29 percent.

Across Asia, equities were mixed following a sell-off on Wall Street after the US Fed poured cold water on hopes for a March interest rate cut.

The downbeat sentiment was compounded by disappointing earnings from US titans Microsoft and Alphabet, which pummeled the tech sector, while investors were also eyeing developments in the Evergrande crisis after its liquidation order by a Hong Kong court this week.

After a much-anticipated meeting, Fed policymakers acknowledged that inflation was going in the right direction and that they expected to begin lowering borrowing costs this year from their two-decade highs.