Stock Market Shifts To Brace For Key Rate Decisions

Wall Street stocks rose while European and Asian markets dropped as investors prepare for interest rate decisions this week from major central banks.

The Philippine Stock Exchange released data on the main composite index down to 2.82 points or 0.04% to settle at 6,582.38. Similarly, the broader All Shares index was down by 5.34 points or 0.16% to end at 3,431.65.

Sectors in mining and oil, holding firms, and the industrial sectors also went down. The total turnover reached ₱5.42 billion. Market breadth remains negative from 113 to 68 while 43 issues were unaffected.

Market analysts predicted that the Fed and the European Central Bank will announce rate hikes this week.

Meanwhile, the Bank of England is on track for a consistent increase as policymakers temper inflation from the highest levels in decades.

“Following a softer session in Asia, European markets are on edge, opening the week lower ahead of a critical few days,” said Victoria Scholar, head of investment at Interactive Investor.

“The ECB, the Fed, and the Bank of England are expected to raise rates by 50 basis points each as the pace of tightening looks set to slow,” Scholar said.

The half-point jumps will still be slight increases as central banks deal with price hikes, particularly in energy and food.

In line with the Federal Reserve’s meeting, investors expect to digest US inflation data on Tuesday.

“It will be a fitting hump day on Wednesday because the (inflation) data and the Fed decision are big humps the market needs to get over if it wants to make a run at a year-end rally,” said market analyst Patrick O’Hare at Briefing.com

“If either, or both, disappoint in a meaningful way, then a year-end rally becomes a more challenging proposition,” he added.

Traders are looking into developments in China as it veers away from a zero-COVID policy that affected its economic growth.

This development was due to widespread protests over nearly three years of lockdown restrictions.

Source: The Philippine Star