PSEi dives to below 6,000; no solid sign of reversal yet says analyst

ABS-CBN News

Posted at Sep 28 2022 05:05 PM

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The bloodbath at the Philippine Stock Exchange Index continued on Wednesday with the main index breaching the 6,000 support level and plunging 2.33 percent to 5,879.68.

Negative sentiments are likely to pull down the index as long as US inflation remains elevated which would prompt the US Federal Reserve to implement more interest rate hikes, Regina Capital Development Corp Equity Analyst Jemimah Alfonso told ANC.

"The stocks have been tanking for almost 3 weeks already. No one seems to be stepping on the break. Honestly, as long as the inflation in the US remain elevated, we are not seeing any solid sign for a reversal yet," Alfonso said.

The US Fed has warned it would continue tightening the policy rate to bring down inflation. 

"With that said we can anticipate the local market to move downwards in the short term and sidewise in the medium term," she added.

The Bangko Sentral ng Pilipinas is widely expected to again raise interest rates in its next meeting in November to tame inflation and manage the peso's depreciation against the dollar, Alfonso said.

The peso on Wednesday fell to as low as P59.02 to the dollar, before slightly recovering and closing at 58.98. Reaching P60 against the greenback is highly possible, analysts have said.