PSEi down 0.65% in early trading as interest rates, global stocks spook market

Philippine share prices plunged at early trades Friday, a day after Bangko Sentral ng Pilipinas raised policy rates by 0.25 percent and the worst performance of Wall Street so far this year gave investors enough reasons to not to nurse long positions in the market. 

 

The main PSEi was down 44.39 points or 0.65 percent to 6,820.43 as of 10:03 a.m. The All Shares index decreased by 28.74 points or 0.70 percent to 4,083.82.

 

The market reacted to the increase in policy rates, Papa Securities Corp. analyst Freya Natividad told GMA News Online.

 

"The adjustment means higher borrowing costs so it will have a negative impact on interest-sensitive sectors like financials," Natividad noted.

 

The index touched a low of 6,800.16 minutes after the opening bell.

 

On Thursday, the central bank raised its policy rates by 25 basis points from record lows as a preemptive response to signs of inflation pressures.

 

The market also tracked the sharp drop in US stocks, Natividad said. "The Dow Jones fell by over 300 points," she said.

 

The Dow Jones industrial average plunged 317.06 points to 16,563.3, the S&P 500 lost 39.4 points to 1,930.67 and the Nasdaq Composite dropped 93.13 points to 4,369.77, Reuters reported.

 

The S&P 500 and Nasdaq both marked their biggest daily percentage drops since April 10. For the Dow, the percentage drop was the biggest since Feb. 3, it added. – VS, GMA News