Market extends losses as Wall St drifts lower

By Iris Gonzales | The Philippine Star
July 07, 2023

MANILA, Philippines — Shares slipped yesterday after Wall Street drifted downward following a rally that sent it roaring 16 percent higher for the year so far.

The benchmark Philippine Stock Exchange index (PSEi) closed at 6,474.26, down by 38.13 points or 0.59 percent, while the broader All Shares index slipped to 3,455.93, down by 13.82 points or 0.40 percent.

Mikhail Plopenio of Philstocks Financial said the local market dropped as investors took the cue from Wall Street, which tumbled after the Federal Reserve’s latest minutes showed that majority of the members agreed to hike rates further.

“This weighed on the local bourse as it stayed in the red territory for the whole day, even dropping to an intraday low of 6,436.54. However, last-minute buying trimmed losses,” he said.

Overall, he said many are still on the sidelines as worries regarding the global economy were heightened amid the monetary policy tightening of advanced economies, while others are waiting for a catalyst to emerge.

As a result, market participation remained weak with a net value turnover of only P3.52 billion, lower than the year-to-date average of P5.35 billion. Foreigners were net sellers with net outflows amounting to P99.41 million.

Among the different sectors, only the banks were in the green, gaining 0.20 percent, while the rest declined. Property led the drop, wiping out 1.74 percent. Losers edged gainers, 100 to 73.

Minutes from the Fed’s latest policy meeting released Wednesday showed that some central bank officials wanted to raise rates in mid-June, though in the end they voted unanimously to keep rates steady.

The threat of further rate hikes has been weighing on investor sentiment. The next focus for the US will be jobs data due out on Friday.

A report on Wednesday showed growth for US factory orders held steady in May, though economists expected to see an acceleration.

Hope is rising that inflation is cooling enough to get the Fed to soon stop its hikes to rates, which undercut inflation by slowing the entire economy. Much of Wall Street expects the Fed to raise rates later this month and perhaps once more later this year, as the Fed has been hinting.