Stocks down on renewed risks

The local stock barometer returned to the doldrums Tuesday as investors weighed potential credit downgrades and lower growth in Britain and the eurozone following the British’s surprise decision to exit the European Union.

The main-share Philippine Stock Exchange index (PSEi) lost 49.21 points or 0.64 percent to close at 7,666.69. Across the region, stock markets were volatile as investors continued to digest the impact of Brexit.

At the local market, all counters traded in the red. There were 94 decliners that outnumbered 82 advancers while 57 stocks were unchanged. Value turnover amounted to P5.14 billion.

Risk of the world falling into a recession and a financial crisis would be limited in the aftermath of UK’s decision to leave the European Union, Nouriel Roubini, professor of economics and international business at the Leonard N. Stern School of Business or New York University, said in a panel discussion at the World Economic Forum’s Annual Meeting of the New Champions 2016.

However, Roubini said he did not expect the world to be out of the woods anytime soon from the stagnation experienced across both advanced and emerging economies. Mediocre growth is the new normal, he quipped, adding that traditional monetary and fiscal policies have lost their efficacy to jumpstart anemic economies and structural reforms had been constrained by politics.

On Brexit, Roubini warned of a global trend of backlash against globalization spurred by the fruits of growth not trickling down to all segments of society. “What we saw in the UK referendum was a division between rich and less rich, young and old, skilled and less skilled. This kind of pressure is becoming severe,” he said. “Look at the United States: You have Donald Trump representing the angry white blue-collar worker, and Bernie

Sanders for both angry white- and blue-collar workers.”

At the local stock market, the PSEi was weighed down by FGEN, which fell by 2.57 percent, while ALI, PLDT, JG Summit, GT Capital, AGI and BDO all declined by more than 1 percent. URC, BPI, AC and Megaworld also contributed to the day’s decline. Doris Dumlao-Abadilla