PSEi tumbles on Fed's imminent tapering of bond stimulus

Philippine shares tumbled at early trades Tuesday, tracking regional trends, on Federal Reserve's (Fed) imminent tapering of its massive bond purchases.

The main PSEi plummeted by 72.99 points or 1.12 percent to 6,436.74 as of 10:26 a.m.

"The market opened in the red, tracking regional trends, due to the rising concerns on Fed's quantitative easing (QE)," Gregg Adrian Ilag, analyst at AB Capital Securities Inc., said in a phone interview.

"A Fed official commented that the tapering of the QE is getting near," he said.

Dallas Fed President Richard Fisher said the drop in last month's unemployment rate puts the Fed nearer to dialing back the program, Reuters reported.

Last week, US jobs data showed non-farm payrolls rose by 162,000 in July, below expectations, but the unemployment rate fell to 7.4 percent, its lowest since December 2008.

Fed is currently buying $85 billion in bonds monthly to keep borrowing costs low, a program that has helped US stocks surge nearly 20 percent this year.

In June, Fed chairman Ben Bernanke announced the US central bank may trim its $85-billion stimulus later this year if the world's largest economy improves. —KG, GMA News