Shares decline big as slowdown looms

Local shares tumbled in choppy trading as investors weighed the likelihood of a recession after US Federal Chairperson Jerome Powell acknowledged that achieving a soft landing without a recession has become “significantly more challenging.”

The Philippine Stock Exchange index (PSEi) slipped by 102.77 points or 1.67 percent to 6,065.23 as the currency’s weakness against the US dollar continued to weigh on sentiment, Philstocks Financial Inc. Research Manager Japhet Tantiangco said.

The local currency which had weakened to below the 54 per US dollar level, is seen to spur upside risks to inflation and discourage foreign investors from parking their funds in the Philippine market.

Investors also traded cautiously while waiting for the Bangko Sentral ng Pilipinas’ (BSP) policy decision.

Trading remained tepid with net value turnover posting P5.25 billion, below the year-to-date average of P6.74 billion.

Foreigners were net sellers with net outflows amounting to P478.57 million.

All sectors lost with Mining shedding the most, down 3.98 percent. Decliners outpointed advancers 143 to 65.

Wilcon Depot Inc. was the top index gainer, climbing 3.47 percent to P23.85. Bank of the Philippine Islands was at the bottom, plunging 4.95 percent to P86.50.

U.S. jobs on radar

Investors are watching out for the job situation in the United States (US). Powell will also give remarks to the House, after having addressed the Senate on Wednesday. The remarks are part of a congressionally mandated semiannual report on monetary policy.

Portfolio managers were also speculating how the BSP would react to inflationary pressures, as they just released that they will be raising policy rates by 25 basis points to 2.5 percent right after market closed.