Stocks drop before Powell’s Jackson Hole speech
STOCKS declined on Friday on profit taking as the market awaited US Federal Reserve Chair Jerome H. Powell’s speech at the annual economic policy meeting in Jackson Hole symposium later that day.
The Philippine Stock Exchange index (PSEi) went down by 65.17 points or 1.04% to close at 6,160.61 on Friday, while the broader all shares dropped by 25.17 points or 0.75% to end 3,332.40.
Week on week, the PSEi likewise fell by 129.66 points or 2.06% from its close of 6,290.27 on Aug. 18.
“Nerves were rattled ahead of Powell’s speech at the Fed’s annual retreat for global central bankers — including the Bank of Japan’s Kazuo Ueda and European Central Bank’s Christine Lagarde — encouraging market participants to cash in from Thursday’s gain,” Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said in a Viber message.
“Cautious investors sold… and waited for the discussion at Jackson Hole. Overall, the market is trading at oversold levels — that’s why we experienced a rally on Thursday,” Mercantile Securities Corp. Head Trader Jeff Radley C. See likewise said in a Viber message.
The Federal Reserve may need to raise interest rates further to cool still-too-high inflation, Fed Chair Jerome Powell said on Friday, promising to move with care at upcoming meetings as he noted both progress made on easing price pressures as well as risks from the surprising strength of the US economy, Reuters reported.
While not as hawkish a message as he delivered this time a year ago at the annual Jackson Hole Economic Policy Symposium, Mr. Powell’s remarks still delivered a punch, with investors now seeing one more rate hike by year-end more likely than not.
The Fed has raised rates by 5.25 percentage points since March 2022, and inflation by the Fed’s preferred gauge has moved down to 3.3% from its peak of 7% last summer. Although the decline was a “welcome development,” Mr. Powell said, inflation “remains too high.”
Back home, all sectoral indices declined on Friday. Financials went down by 28.99 points or 1.56% to 1,829.46; property fell by 38.67 points or 1.48% to 2,559.82; services slumped by 12.56 points or 0.82% to 1,506.79; holding firms dropped by 42.75 points or 0.72% to 5,840.88; industrials declined by 23.52 points or 0.27% to 8,700.60; and mining and oil lost 3.05 points or 0.03% to end at 9,930.33.
Value turnover went up to P3.57 billion on Friday with 340.80 million shares changing hands from the P3.31 billion with 415.26 million issues seen on Thursday.
Decliners outnumbered advancers, 101 versus 66, while 43 names closed unchanged.
Net foreign selling rose to P657.76 million on Friday from P263.91 million on Thursday. — Sheldeen Joy Talavera with Reuters
