The stock sank further as it looked at rate hikes ahead of the BSP

The head of the central bank said he could consider a rate hike in June and shares closed lower on Wednesday amid fears of a global uptick as coronavirus disease 2019 (COVID-19) cases continue to rise in China.

The Belvedere Philippine Stock Exchange Index (PSEi) fell 116.11 points, or 1.66%, to 6,863.91 on Wednesday, while the broader all-share index closed 52.06 points, or 1.40%, lower at 3,660.33.

Philstock’s Financial, Inc. Senior Research Analyst Jafet Louis O. Tantianko Viber said in a message that Bangkok Central NGO Pilippinus (BSP) Governor Benjamin E. Local stocks fell as investors reacted to Diocono’s statement.

“Wednesday’s fall (possibly) is responsible for investors’ reaction to earlier rate hike signals from the BSP,” Mr Tantianko said.

Mr Diokno said in an interview with Bloomberg Television that the central bank could consider raising benchmark interest rates at its June 23 meeting.

If the economy grows by about 6% -7% in the first quarter, policymakers could wait for another cycle after the May 19 meeting, he said.

The BSP chief had earlier said that the central bank could start raising rates in the second half of this year and that a 2.5% -2.75% increase was “reasonable” as part of the normalization process.

Meanwhile, Lewis A., head of sales at Regina Capital Development Corporation. Limlingan says local shares have ended up in negative territory amid growing cases of Kovid-19 in China, the world’s second-largest economy, which could lead to a global recession.

Millions of people in Beijing tested their second Covid-19 on Wednesday as they tried to keep the number of outbreaks within a few dozen from turning into a crisis in the Chinese capital, Shanghai, Reuters reported.

The data shows that six of Shanghai’s 16 districts had zero cases outside the quarantine area, with seven more in single digits. In all, Shanghai identified 171 such cases on Tuesday, down from 217 on Monday.

“Moody’s Analytics cut its Philippine GDP forecast this year to 6.1% (vs. 6.4% March projection) this year due to the impact of slow global demand and rapid inflation on the economy,” Mr Limlingan added.

Indexes for all sectors declined on Wednesday. Mining and oil lost 451.30 points, or 3.77%, to 11,490.43; Assets decreased by 70.16 points or 2.16% to 3,170.86; Holding companies fell 138.88 points, or 2.12%, to 6,408.31; Financial was down 22.10 points or 1.34% to 1,627.12; Services fell 25.25 points, or 1.30%, to 1,916.52; And industries were down 69.08 points, or 0.73%, at 9,343.47.

Decliners made the best of the pioneers, 138 out of 49, while 43 names remained unchanged.

With a change of 816.50 million shares on Wednesday, the value turnover reached P8.78 billion, up from P4.11 billion with 549.51 million issues logged the previous day.

Net overseas purchases reached P1.67 billion on Wednesday, a turnover from P312.19 million in net sales posted on Tuesday. – Reverend Mikhail D. Ochav With Reuters