Philippines share prices are likely to track Wall Street and regional markets next week after a sharp sell-off triggered by fears of rising US interest rates and slower growth, dealers said Friday.
They said billions of dollars have been wiped off the region's markets since May 10, when US Federal Reserve chief Ben Bernanke suggested the current cycle of rate hikes, rather than being close to an end might run further.
This was largely due to historically high oil, metal and other commodity prices which have raised the costs of transportation and production, and begun feeding into inflation figures.
Then Bernanke stoked investor fears again on Monday, noting in a speech that while the US economy was slowing, inflation was also rising because of high energy prices - the worst possible combination for stock markets.
His outlook struck a nasty chord with investors across the Asia/Pacific who expect their own central banks to follow suit with the Fed in order to maintain parity and provide a buffer for their currencies.
Unlike other sharp corrections of recent years, dealers now fear this massive sell-off could signal the end of a three-year bull run, with higher interest rates bound to curb a consumption boom fuelled by debt.
"We will probably take the cue from markets overseas," said Gomer Tan of Regina Capital Development Corp.
For the week to June 9, the Philippine Stock Exchange composite index plunged 144.67 points or 6.28 percent to 2,159.50 points.
Average daily turnover fell to 1.45 billion shares worth 1.3 billion pesos (24.6 million dollars) from the previous week's 1.47 billion shares worth 2.25 billion pesos.
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