The local stock market fell again as investors worry about the possibility of a new surge in Covid cases as higher interest rates due to rising inflation.

The main index plunged 117.19 points or 1.87 percent to close at 6,168.00 with the Property sector suffering the biggest drop. Volume increased to 905 million shares worth P4.27 billion as losers beat gainers 115 to 68 with 48 unchanged.

“Philippine shares fell into oversold territory as the market awaits the Fed Chair Jerome Powell to appear before Congress later, kicking off two days of testimony,” said Regina Capital Development Corporation Managing Director Luis Limlingan.

He added that, “Meanwhile at home, the BSP is scheduled to hold its 4th policy-setting meeting on Thursday (Jun 23). As per Bloomberg, the street widely expects a 50bp rate hike following the Fed's aggressive tightening last week. However, it is noted that incoming BSP Gov. Felipe Medalla hinted the pace of subsequent tightening could be gradual.”

“U.S. stocks rose last night as investors assessed a more aggressive Federal Reserve and rising chances of a recession. Note, however, that some investors have doubts that this bounce will be the one that marks the turn, especially with no apparent news or catalyst driving it,” Limlingan added.

AB Capital Securities said “The PSE index slipped as the peso continues to depreciate against the US dollar, after the BSP hinted gradual interest rate hikes in their upcoming policy meetings.”