February 8, 2023

Market and Financial News

Market and Financial News Aggregator

Shares down on inflation estimate, Fed worries

2 min read

STOCKS continued to decline on Wednesday as the Philippine central bank said inflation may breach 5% in May and amid expectations of aggressive tightening by the US Federal Reserve.

The benchmark Philippine Stock Exchange index (PSEi) fell by 62.47 points or 0.92% to close at 6,712.21 on Wednesday, while the broader all shares index dropped by 17.13 points or 0.47% to 3,589.78.

“Philippine shares closed the session in the red, underscoring fears that high inflation is weighing on economic growth,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“The local market extended its decline this Wednesday as the BSP’s (Bangko Sentral ng Pilipinas) projection of a faster inflation in May dampened sentiment,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco added in a Viber message.

May inflation may have reached between 5% and 5.8%, BSP Governor Benjamin E. Diokno said on Tuesday. This is well above the 2-4% target of the central bank for this year.

The consumer price index last hit the 5% level in December 2018 and stood at 5.2% that month.

May inflation data will be released by the Philippine Statistics Authority on June 7. Headline inflation was at 4.9% in April, the highest in more than three years.

Regina Capital’s Mr. Limlingan said that June also marks the start of the Fed’s plan to reduce its balance sheet.

“Supply pressure might prevail, as sentiment glides to Wall Street’s weakness, given a Fed official’s comment on how the Fed should consider raising interest rates,” online brokerage 2TradeAsia.com said in a report.

The Fed begins shrinking asset holdings built up during the pandemic on Wednesday. Traders expect it will raise rates by 50 basis points at meetings this month to make a dent in an inflation rate running more than three times its goal, Reuters reported.

Fed Governor Christopher Waller on Monday said he is advocating to keep 50-bp rate hikes on the table…


2022-06-01 09:00:55

All news and articles are copyrighted to the respective authors and/or News Broadcasters. VIXC.Com is an independent Online News Aggregator

Read more from original source here…

Leave a Reply

Copyright © All rights reserved. | Newsphere by AF themes.