MANILA, Philippines - Share prices erased early gains as caution grew ahead of the expected increase in US interest rates, analysts said.
The Philippine Stock Exchange index (PSEi) went down 10.07 points, or 0.14 percent, finishing at 6,911.86, while the broader All Shares index also settled below the 4,000 mark, ending at 3,986.43, down 6.80 points or 0.17 percent.
Yesterday’s trading session reflected investor jitters on the impending US interest rate hike, analysts said.
“I guess everybody’s focused on what the Fed would do right now. Everyone’s focused on the Fed,” said April Lee Tan, head of Research of COL Financial.
At the same time, Tan said if interest rates keep going up this would have a negative impact on the equity market.
“We expect rates to go up but not aggressively. Slight increases in interest rates really aren’t that bad for stocks,” Tan said.
She advised investors to unload if the market becomes too expensive and return later when prices are better.
Tan said the outlook for the stock market is still positive over the long-term.
US Fed chairman Janet Yellen commented on the improving US economy, affirming expectations the US Fed would likely raise rates.
Yellen said recent economic figures support the central bank’s expectations of an improved job market, adding however, the bank would be cautious in raising interest rates and that this would remain accommodative.