Stocks fall sharply; ACEN and Ayala Land lead losers
Stocks plunged on Wednesday as the peso and other major currencies plunged against the U.S. dollar and on fears of a bigger rate hike from the Federal Reserve.
The Philippines’ stock index fell 115.52 points, or 2.3 percent, to 6,554.08 on revenue of 4.8 billion pesos. The losers outsold the winners, 115 to 59, with 50 numbers unchanged.
Ayala Group’s main property developer Ayala Land Inc fell 4.5% to 28.55P, while sister unit ACEN CORP. fell 3.7% to 7.03P.
Sy Group’s BDO Unibank Inc., the largest lender by assets, fell 3% to P124.20, but AbaCore Capitol Holdings Inc., a company that has exclusive right to lease lottery equipment online for Philippine Charity Sweepstakes Office lotto operations in Visayas and Mindanao, climbed 3.1% to 2.66p.
The dollar, meanwhile, surged against other major currencies on Wednesday and stocks tumbled after a better-than-expected U.S. economic report breathed new life into talks of a third consecutive interest rate hike next month. .
Data from the services sector showed the world’s biggest economy remained resilient in the face of soaring prices and borrowing costs, underscoring the Federal Reserve’s work to tame inflation while trying to stave off a recession – a goal that many observers doubt can be achieved.
The reading added to the gloom that blankets trading floors as investors face a series of headwinds, including a deepening energy crisis in Europe, Russia’s war in Ukraine and Chinese economic difficulties caused by COVID-19 lockdowns.
“Overall, the (services) survey paints a picture of solid activity in the services sector of the U.S. economy, supported by wage growth, suggesting the Fed still has some work to do. to calm the economy,” said National Australia Bank’s Rodrigo Catril.
All three major Wall Street indexes ended in the red on Tuesday as they reopened after a long weekend, with expectations mounting that the Fed will announce a third straight 75 basis point rate hike later this month. .
Losses in New York were followed by Asia, where Hong Kong, Tokyo, Sydney, Seoul, Singapore, Taipei, Wellington, Mumbai and Jakarta all fell, although Shanghai and Bangkok rose slightly.
Several top Fed officials, including Chief Jerome Powell, have lined up in recent weeks to say their primary goal is to bring inflation down from four-decade highs, even if that means tipping the economy into recession.
The prospect of further, bigger rate hikes has pushed the dollar higher this year, and on Wednesday it hit a new 24-year high of 144.38 yen before pulling back slightly.
Yen losses continued to mount despite comments from government officials hinting at possible intervention to provide support, although there was no sign that the Bank of Japan would back down from its ultra-accommodative monetary policies aimed at to revive the economy.
The euro has remained below parity with the dollar and at its lowest level in 20 years, even as the European Central Bank prepares to raise rates, which it did in July for the first time in eight year. With AFP