Philippine stocks tumble on EU woes

MANILA, Philippines-Local stocks sank further on Friday, dragging the main index below 4,300, as the European Union was seen at risk of failing to get its act together to prevent a worsening of the fiscal contagion.

The main-share Philippine Stock Exchange index shed 20.39 points or 0.47 percent to finish at 4,292.50.  This brought the main index ahead by a meager 1.58 points from last week’s close.

This developed as regional markets were worried that the EU Summit won’t bring out concrete measures to ease the euro-zone’s woes. The European Central Bank slashed its key interest rate by 25 basis points to 1 percent, in a widely anticipated “dovish” move, but it also ruled out any bond buyback intervention that investors were hoping for as this would have ensured manageable borrowing costs for the EU’s weakest states.

Furthermore, Germany and France are failing in their campaign to get the eurozone bloc’s 27 members to back changes to the EU treaty which would have introduced better fiscal discipline and tighter fiscal integration among member-states.

Given the lack of positive news from the much-awaited EU Summit this week, risk aversion intensified in Wall Street overnight.  The Dow Jones Industrial Index tumbled by 198.67 points or 1.63 percent to 11,997.70.

The local stock market thus succumbed to the weak sentiment elsewhere in the world.
The most battered counter for the day was the industrial sector whose sub-index dropped by 1 percent.  Only the mining/oil index ended in positive territory on the back of gains eked out by Lepanto A (open to only to local investors) and B (open to all) and Philex Mining.

Value turnover for the day amounted to P5.2 billion.  There were 66 advancers which were outnumbered by 87 decliners while 36 stocks were unchanged.

The index was weighed down most by the share price decline of SM Investments, ICTSI, Megaworld, Ayala Land, BPI, URC and Aboitiz Power.

On the other hand, the PSEi’s losses were stemmed by the gains of AGI, PLDT, Metrobank, SMC, Semirara and Philex.

Apart from recent market favorite Lepanto, gaming stock LR and retailer Puregold also bucked the day’s downturn in heavy trading volume.