Inflation, rate worries hound market anew

MANILA, Philippines — Share prices eased yesterday to snap a three-day upturn as investors took profits from the market’s recent gains.

Most Asian equities lost ground yesterday as a chorus of hawkish commentary from US Federal Reserve officials reinforced the central bank’s intention to deliver more rate hikes.

Asian shares also followed Wall Street lower ahead of US jobs data investors hope will persuade the Fed to ease off plans for more interest rate hikes.

Several Fed officials affirmed their commitment to rein in soaring inflation, with no intention of backing down from the most aggressive rate hike campaign in decades. Although some soft US economic data out during the week suggested the economy could be starting to feel the effects of the aggressive tightening, other data backed the need for more rate increases over coming months.

Non-farm payrolls data due later in the day and September inflation print expected next week are likely to drive global markets in the near-term, with any comments from Fed officials likely to weigh on emerging assets.

At the Philippine Stock Exchange, the main index ended the week in the red as lingering concerns over inflation and rising interest rates prevailed.

The benchmark PSEi slipped to 5,932.19, down 2.08 points or 0.04 percent, while the broader All Shares index ended nearly flat at 3,200.59, up 0.80 point or 0.03 percent.

Total value turnover reached P4.153 billion. Market breadth was negative, 96 to 84, while 44 issues were unchanged.

Veteran market analyst Jonathan Ravelas said with inflation and interest rates yet to peak, the market remains vulnerable to selloffs.

On Wall Street, the benchmark S&P 500 index fell on Thursday after a private sector report said US employers hired slightly more workers than forecast in September. That gives ammunition to Fed officials who say more rate hikes are needed to cool the economy and rein in inflation that is at a four-decade high.

US government data due out Friday are expected to show fewer people were hired compared with previous months. Investors hope that will help persuade the Fed five rate hikes this year are working and it can scale down plans for more.