PSEi sinks to 5,610 on rate hike fears

Philippine stocks fell sharply on Thursday as expectations of further interest rate hikes in the United States and at home dampened investor sentiment, while foreign funds pulled out of the market.

The benchmark Philippine Stock Exchange Index (PSEi) dropped 2.20 percent, or 126.30 points, to close at 5,610.39.

Philstocks Financial Inc. attributed the decline to mounting concerns over tighter monetary policy from both the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP).

The brokerage said the Fed’s latest meeting minutes signaled another possible rate hike before year-end.

At home, the latest inflation reading of 7.2 percent raised expectations of further monetary tightening by the BSP.

Higher interest rates can increase borrowing costs for businesses and consumers, weighing on spending and corporate earnings.

Luis Limlingan, head of sales at Regina Capital Development Corp., said the local index ended lower as selling pressure intensified amid rising crude oil prices, with oil nearing $104 per barrel.

“Moreover, sentiment weakened as traffic through the Strait of Hormuz fell to a two-month low, raising concerns over potential supply disruptions,” Limlingan said.

“Investors remained cautious as elevated oil prices could further weigh on inflation and economic growth,” he added.

Trading was strong despite the decline, with net value turnover reaching P6.38 billion.

Foreign investors ended the session as net sellers, recording net outflows of P1.18 billion.

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All sectoral indices finished in negative territory. Services suffered the steepest decline, falling 4.86 percent.

San Miguel Corp. bucked the downturn to become the day’s top index gainer, rising 2.67 percent to P61.50.

Semirara Mining and Power Corp. was the biggest index loser, plunging 13.39 percent to P11.

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