PSEi extends slide amid fears of recession in US
2 min read
LOCAL SHARES continued to drop on Thursday amid fears of a possible recession in the United States after the release of the minutes of the US Federal Reserve’s March policy meeting.
The Philippine Stock Exchange index (PSEi) declined by 20.55 points or 0.31% to close at 6,448.87 on Thursday, while the broader all shares index fell by 8.75 points or 0.25% to end at 3,466.52.
“Philippine shares notched lower as investors weighed recession risks following the latest meeting minutes from the Fed. The FOMC (Federal Open Market Committee) meeting minutes showed that the central bank expects the recent banking crisis to cause a recession later this year,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.
“This overshadowed the fact that inflation cooled in March as the Fed’s interest rate increases showed more impact. The CPI (consumer price index) rose 0.1% in March and 5% from a year ago, below estimate,” Mr. Limlingan added.
Mercantile Securities Corp. Head Trader Jeff Radley C. See said investors mostly stayed on the sidelines.
“With a lower CPI announcement last night, investors were still mixed since the ball is with the Fed,” Mr. See said in a Viber message.
Several Federal Reserve policy makers last month considered pausing interest rate increases after the failure of two regional banks and a forecast from Fed staff that banking sector stress would tip the economy into recession, Reuters reported.
“Several participants… considered whether it would be appropriate to hold the target range steady at the meeting” to assess how financial sector developments might influence lending and the path of the economy, according to the minutes of the FOMC’s March 21-22 meeting, which were released on Wednesday.
Fed staff assessing the potential fallout of banking sector stress projected a “mild recession” starting later this year, with a recovery in 2024-2025, the minutes showed.
Back home, almost all sectoral…
BusinessWorld
2023-04-13 09:00:36
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