ANOTHER HIKE. Both the Philippine Stock Exchange index (PSEi) and the peso declined on Tuesday (Sept. 27, 2022) amid recession fears following another 75 basis point increase in the Federal Reserve’s key rates. The local currency even posted a new all-time low against the US dollar at 58.99. (PNA graphics)

MANILA – Risk-off sentiments reigned in the local bourse on the resumption of the week’s trading on Tuesday and the peso registered another all-time low against the greenback due to hikes in the Federal Reserve’s key rates.
The Philippine Stock Exchange index (PSEi) shed 3.83 percent, or 239.47 points, to 6,020.07 points.
All Shares followed with a drop of 3.20 percent, or 107.06 points, to 3,234.23 points.
Holding Firms posted the biggest decline among the sectoral gauges after it fell by 4.58 percent.
It was trailed by Financials, 4.29 percent; Property, 3.92 percent; Industrial, 2.96 percent; Mining and Oil, 2.93 percent; and Services, 2.19 percent.
Volume reached nearly 2.2 billion shares amounting to PHP20.88 billion.
Decliners led advancers at 189 to 28, while 37 shares were unchanged.
“The market sell-off resumed with local shares following the equity sell-off stateside on the back of an aggressive Federal Reserve and surging interest rates, which in turn have roiled currency markets,” said Luis Limlingan, Regina Capital Development Corporation (RCDC) head of sales.
Last week, the Federal Reserve’s key rates were increased by another 75 basis points, the third consecutive hike of the same level, as monetary authorities address the four-decade high inflation in the United States.
Limlingan said the latest Federal Reserve funds rate increase, along with the tax cut announcement by the UK last week, caused the US dollar to strengthen further and pushed the peso towards the 59-level.
He said the S&P 500 slipped by 5.03 percent to 3,655.04, lower than last June’s low of 3,666.77 level.
The Dow Jones also fell by 329.60 points or 1.11 percent to 29,260.81.
“The recession fears brought about by currency volatility also led to oil prices falling,” Limlingan said.
He said Brent crude oil futures for November slipped by 2.1 percent to USD84.32 per barrel and the West Texas Intermediate (WTI) by 2.3 percent to USD76.97 per barrel.
Meanwhile, the peso registered another all-time low against the US dollar after finishing the trade at 58.99 from 58.5 last Friday.
There was no trading on Monday after Malacanang suspended government work and public school classes as Super Typhoon Karding (Noru) devastated parts of Luzon.
The peso opened the day’s trade at 58.8, a depreciation from its 58.35 start in the previous session.
It traded between 58.999 and 58.7, resulting in an average of 58.904.
Volume reached USD1.06 billion, higher than the USD985 million at the end of last week.
Analysts said the peso’s performance is in line with those of other currencies as the greenback appreciates given the hikes in the Federal Reserve rates. (PNA)