Stocks slump on China worries

The local stock barometer slid below the 6,600 support level Friday as jitters over China’s foreign exchange and stock markets reverberated across global markets.

The Philippine Stock Exchange index (PSEi) lost 43.45 points or 0.66 percent to close at 6,575.43. For the first trading week of 2016, the main index lost a total of 376.65 points or 5.42 percent, a gloomy curtain-raiser for what most investors expected to be a very challenging year ahead.

The Shanghai index rebounded by 1.97 percent yesterday as state-owned funds reportedly loaded up on oversold stocks while China dropped the circuit-breaker rules, which only deepened the market rout in previous days. Nonetheless, investors are still jittery on China.

“The scale of global spillover from China’s recent policy shifts raises the risk of a reversal in stance in the short-run,” Citigroup said in a research note. “While many focus on the Chinese equity market as the source of global contagion, China’s foreign exchange policy also plays a large role. In this environment of elevated volatility and extreme policy uncertainty, investors should reduce risk exposure.”

At the local market, all counters ended in the red but the most battered were the financial and services counters, which both slipped more than 1 percent.

Value turnover stood at P5.57 billion. There were more than thrice as many decliners for every single gainer in the market.

Local banking giants BDO and Metrobank led the PSEi lower, both declining more than 2 percent, while Ayala Land Inc., PLDT, Ayala Corp. and Megaworld all slipped by more than 1 percent.

Universal Robina Corp., GT Capital, SM Investments Corp., Globe Telecom, Metro Pacific Investments Corp. and Meralco also contributed to the day’s decline.

Outside of PSEi stocks, Robinsons Retail Holdings slipped by 3.56 percent on profit-taking while Filinvest Land Inc. and Cebu Air also both fell more than 2 percent.

SM Prime, JG Summit and BPI bucked the day’s downturn albeit making only modest gains.

Gaming firm LR rose by 1.72 percent in relatively heavy trade. Doris Dumlao-Abadilla