Index plunges as Fed hints at December rate hike

MANILA, Philippines - Share prices fell big time yesterday on news that the US Federal Reserve would raise interest rates by year-end.

The Philippine Stock Exchange index (PSEi) plunged 100.01 points or 1.37 percent to end at 7,189.25, while the broader All Shares index also followed suit, dropping 45.86 points or 1.10 percent at 4,143.39.

Analysts attributed yesterday’s major decline on the US Federal Reserve’s statement during its two-day meeting which hinted the possibility of a December rate hike.

“No one expects the Fed to make any move at this meeting. But what the market waits for is the language of the statement it will issue,” Philstocks Financial analyst Justino Calaycay Jr. said.

With the US Fed opening its doors for rate hike, markets in Asia also felt the pinch as most ended in the negative territory.

Locally, counters were all in red with five of the six counters finishing with a more than one percent loss.

Property firms led the drop with a 2.32 percent fall followed by the mining and oil firms with a 1.66 percent drop.

Market breadth was negative as decliners crushed advancers, 106 to 57, while 48 stocks did not change. Value turnover was thin at P6.53 billion.