Index drops for 5th straight trading session

MANILA, Philippines — Asian equities fell ahead of a slew of central bank meetings this week, including a rate decision by the US Federal Reserve.

At the Philippine Stock Exchange, the benchmark PSE index (PSEi) fell for the fifth straight session yesterday to close at its lowest level since Aug. 8.

“The PSEi lost 111.35 points (down 1.70 percent) to close at 6,437.42 ahead of the BSP and US Fed policy meetings scheduled later this week as investors remain cautious of rising interest rates and the depreciating peso,” said AB Capital Securities in a note.

The broader All Shares index was likewise down, finishing 48.41 points or 1.39 percent lower at 3,426.00.

Net market value turnover was P4.98 billion, with foreigners as net sellers at P286.62 million.

First Metro Investment Corp. said persistent inflation worries continue to hound the market as well as the weakening of the peso against the dollar.

“The Fed (meeting on rates) looks set to dominate the narrative on risk assets. Against this backdrop, a mood of caution is likely to prevail ahead of the FOMC meeting mid-week,” said Mizuho bank economist Vishnu Varathan.

Currently, markets are pricing in at least another 75-basis-point rate increase for Wednesday’s Federal Open Market Committee’s (FOMC) meeting, and 19 percent odds of a super-sized full percentage point rise.

Aside from the Fed, Asia-focused investors will also be on the lookout for central bank meetings in Japan, Indonesia, Taiwan and the Philippines, as well as a decision on China’s loan prime rate. The week is also littered with inflation data from Japan, Singapore and Malaysia. Bank Indonesia, the Bangko Sentral ng Pilipinas and Taiwan’s central bank are all expected to hike interest rates this week, with Japan being the exception.

The Bank of Japan has so far shown no sign of abandoning its uber-easy monetary policy despite the drastic slide in the yen.