MANILA, Philippines — Despite paring losses late in the session, share prices returned to negative territory yesterday following the drop on Wall Street, as fears global economic activity will be depressed by interest rate hikes to cool inflation resurfaced.
The benchmark Philippine Stock Exchange index (PSEi) closed at 6,331.56, down 61.45 points or 0.96 percent.
Likewise, the broader All Shares index slipped to 3,394.95, down 40.29 points or 1.17 percent.
The sectoral gauges, meanwhile, were mostly in the red except for services, the lone counter which ended in positive territory.
Total value turnover reached P11.7 billion. Market breadth was negative, 133 to 57, while 45 issues were unchanged.
Stock brokerage firm Regina Capital said local shares resumed their selloff as recession fears resurfaced.
Investors worry the moves to control inflation that is running at four-decade highs might tip the US and other major economies into recession.
“Pain is being inflicted almost everywhere and sharing doesn’t make it better in any way,” said Tan Boon Heng of Mizuho Bank in a report.
Wall Street’s benchmark S&P 500 index tumbled 3.3 percent on Thursday after Britain’s central bank followed the Federal Reserve in raising its key interest rate to cool surging prices. Central banks in Switzerland and Taiwan also raised rates.
Markets were not assuaged by comments by President Joe Biden to The Associated Press on Thursday that he saw reasons for optimism about the economy.
A recession is “not inevitable,” Biden said.
On Wall Street, the S&P 500 retreated to 3,666.77 for its sixth decline in the past seven trading sessions. The benchmark gave up its 1.5 percent gain of the previous day after the Fed announced a rate hike of 0.75 percentage point, three times its usual margin. Chair Jerome Powell said Wednesday the Fed is “not trying to induce a recession now.”
The S&P 500 is 23.6 percent below its Jan. 3 record. That erases gains from 2021, one of Wall Street’s best years this century.