PSEi slips to 7,300 level on China rout

THE LOCAL stock barometer slid to the 7,300 levels on Wednesday as the stock market meltdown in China soured risk appetite across the region.

The Philippine Stock Exchange lost 79.22 points or 1.06 percent to close at 7,363.43, marking the fourth straight session in the doldrums.

Across the region, stock markets were in the red as the selldown in China started to make regional markets, already worried over the Greek debt crisis, more jittery.

Investment bank Merrill Lynch BofA said this market crash signified loss of faith on the Chinese government’s ability to manage asset prices and warned that the damage could spread far beyond the stock market. It said the value of renminbi, debt and property in China may be re-priced lower as a result of this. It warned that this could be a trigger for a financial crisis in China.

Wilson Sy, director at Philequity Management Inc., said the rout in China was a concern for local markets, especially as this was happening in tandem with the debt crisis in Greece. He noted that the 33 percent decline from the peak of the Chinese markets and the suspension of trading on so many Chinese companies were unprecedented.

“China is the second biggest economy and a slowdown in China which we’re seeing is going to affect global growth,” Sy said.

At the local stock market, all counters were in the red, led by the mining/oil sub-index which fell by 2.36 percent. The financial and industrial sub-indices tumbled by over 1 percent.

Value turnover for the day amounted to P7.98 billion. There were nearly three times as many decliners (130) as there were advancers (46).

Metrobank tumbled by 4.3 percent while URC – the day’s most actively traded stock – fell by 3.53 percebt. JG Summit was down by 2.6 percent while Megaworld, PLDT, SMIC and Jollibee all declined by over 1 percent.

BDO, GTCAP, AC, Meralco and AEV also declined.

Outside of PSEi stocks, SSI (-1.13 percent) and Security bank (-0.53 percent) also slipped in heavy volume.

On the other hand, AGI, SMPH and Globe eked out modest gains.