THE Philippine Stock Exchange extended its decline on Wednesday as it lost by 106.62 points (1.59 percent) to close at 6,583.65.
Philstocks Financial Inc. research associate Claire Alviar and Rizal Commercial Banking Corp. chief economist Michael Ricafort said this comes as US markets extended their losing streak amid worries that the Federal Reserve (Fed) will continue with its aggressive policy tightening.
"The main index also breached the 6,600 support level amid a lack of positive catalysts. If the market will not return above 6,600, then the next support would be at the 6,400 level," Alviar added.
US stocks also did not fare well as the Dow Jones Industrial Average and the Standard and Poor indices went down by 0.96 percent and 1.10 percent, respectively, on Tuesday, US time.
Regina Capital Development Corp. Managing Director Luis Limlingan also noted that New York Fed President John Williams called for a "somewhat restrictive policy to slow demand." This was ahead of Friday's closely watched August jobs data and more Fed speeches which are slated for Wednesday in the United States.
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"The EU (European Union) is also considering raising interest rates, as the Eastern Central Bank policymaker and Estonian central bank governor Madis Muller said the central bank should also discuss a 75-basis-point hike in September in order to combat inflation," Limlingan added.
Oil prices plunged steeply because of inflation fears and brewing unrest in Iraq. Brent crude futures fell 5.5 percent to $99.31 per barrel, and the US West Texas Intermediate crude shed 5.5 percent, settling at $91.64 per barrel.
The market's decline was strong with a net value turnover of P8.59 billion, higher than this month's average of P6.08 billion.
Sectors were mixed, as properties was the sole winner, up 0.98 percent. Holding firms fell steeply, plunging by 3.51 percent.
Decliners dumped advancers, 128 to 67, while 42 securities remained unchanged.