The Philippine Stock Exchange index (PSEi) ended flat on Thursday at 7,295.45, slightly higher by 0.01 percent or 0.89 points. Analysts said investors remained on the sidelines as US Federal Reserve is set to release its policy review as well as critical US economic data.

Here are three fast facts on PSEi ending flat ahead of Fed meeting:

1. The PSEi took its cue from the Fed that will most likely to implement interest rate hike in March.

“Philippine markets once again traded flat to slightly up as the market waited for additional cues ahead of the FOMC (Federal Open Market Committee) meeting happening next week in the US,” Business World reported Regina Capital Development Corp. Managing Director Luis Limlingan as saying. The Fed is scheduled to meet on March 14-15.

The Fed started to signal that interest rate hikes will soon follow after it implemented an increase of interest rate, changing its range from 0.25 percent to 0.5 percent to 0.5 percent to 0.75 percent in December. International future traders are convinced that an interest rate hike in March will happen, with an expected increase of benchmark fed funds rate by 25 basis points to a range of 0.75 percent-1 percent.

2. The PSEi also tracked the performance of the Wall Street indices following the recent decline in the oil prices.

Limlingan added that the PSEi traded slightly up as S&P 500 and the Dow [Jones Industrial Average] fell for a third session Wednesday as oil prices settled at a three-month low, dragging on energy stocks. S&P 500 ended at 2,362.98, down 0.2 percent while Dow Jones lost  0.3 percent ending at 20,855.73.

3. The PSEi is expected to have downward bias until the Fed’s policy review as well as due to the lack of catalysts.

 Analysts are convinced that the Fed will implement increase following the positive reports on the 298,000 private payrolls in February. This was the highest monthly gain since January 2006.

“Later today and tomorrow, more critical economic data point will be released: continuing jobless claims (Thursday night), US non-farm payrolls (Friday) and the unemployment rate (Friday),” The Philippine Daily Inquirer reported Limlingan as saying. It is expected that investors were to remain safe ahead of the release of these reports.

“The same trend is expected until the FOMC announcement,” First Grade Finance, Inc. Managing Director Astro C. del Castillo said. Investors are also expected to remain on the sidelines as major market influencers remain absent.

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