Local equities dropped on Wednesday, Feb. 28, in light of hawkish comments from the United States Federal Reserve, indicating more than three rate hikes for the year.

The 30-company Philippine Stock Exchange index (PSEi) shed 1.36% or 117.09 points to close at 8,475.29 on Wednesday. The all-shares index also lost 0.7% or 35.79 points to 5,082.94.

“PSEi’s dip could be due to weakness in the US markets last night after Jerome Powell signaled the possibility of more than three hikes this year,” Papa Securities Corp. Trader Gabriel F. Perez said in an e-mail.

The new Fed chairman expressed optimism on the growth of the US economy, which would prompt them to raise interest rate hikes more frequently this year.

“It’s no longer a question on whether the US Fed will raise interest rates, because they will raise interest rates. The question of the frequency, how many times, will it be two, three, four. After last night’s testimony, the ante on a four-time rate hike has seen more adherence, they’re looking at three and four rate adjustments,” Philstocks Financial, Inc. Head of Research Justino B. Calaycay, Jr. said by phone.

US markets ended in negative territory following Mr. Powell’s statements, with the Dow Jones Industrial Average giving up 1.16% to 25,410.03. The S&P 500 index was down 1.27% to 2,744.28, while the Nasdaq Composite index slipped 1.23% to 7,330.36.

The property sector posted the largest decline, dipping 2.4% or 91.59 points to 3,721.70. Holding firms lost 1.69% or 147.41 points to 8,585.06; financials dropped 0.5% or 11.28 points to 2,225.65; while services decreased 0.31% or 5.45 points to 1,745.89.

On the other hand, the mining and oil sector recovered, rising 0.2% or 24.43 points to 12,253.82, while industrial climbed 0.11% or 13 points to 11,440.91.

A total of 16.91 billion issues switched hands, valued at P9.97 billion, higher than Tuesday’s P9.25-billion turnover. Advancers trumped decliners, 111 to 96, as 52 issues remained flat.

Foreign investors were sellers for the seventh straigh day, with net outflows ballooning to P939.04 million, against the P276.98 million booked in the previous session. — Arra B. Francia