MANILA, Philippines—Most local stock prices tumbled sharply on Thursday as a string of negative news in Europe and the US dampened investors’ risk-taking.
The main-share Philippine Stock Exchange index slumped by 88.76 points, or 1.74 percent, to close at 5,020.85.
“The PSEi continues to experience intense volatility due to ongoing European crisis. Investors, however, should understand that local volatility is not reflective of underlying economic or corporate fundamentals,” local brokerage Campos Lanuza & Co. said.
“The main question is whether the capital markets will still be open once investors in Philippine infrastructure reach out for more cash. That is what today’s heightened volatility should make investors think about when making a strategic call on the Philippines,” the brokerage said.
Metropolitan Bank & Trust Co. noted that Wall Street had closed lower after a see-saw overnight on the back of deepening worries over the European Union along with weak US retail sales data. It also noted that Moody’s had cut Spain’s sovereign rating to Baa3 from A3, one level above junk status, and placed it on a negative watch for a possible further downgrade.
Metrobank said that weakness in US equities overnight was expected to weigh on investor sentiment, which had likewise anticipated downward pressures ahead of the Italian bond auction on Thursday and the Greek election this Sunday.
At the local market, the services and financial counters were the most battered, sliding by 3.5 percent and 2.13 percent, respectively.
Turnover amounted to P18.66 billion, including a P7.44 billion block sale on URC after an overnight placement of 120 million in treasury stocks at P62 per share.
There were 105 decliners against 53 advancers while 33 stocks were unchanged.
URC shares were down by 5.6 percent to P61.50 as market prices took their due from the discounted private placement.
The main index was also dragged down by the price declines in PLDT, Megaworld, Aboitiz Power, Metrobank, AEV, SM Investments, Globe, DMCI, BDO, Semirara and JFC.
Newly listed Calata, the most actively traded stock, declined by 32 percent. Bloomberry also dipped by 1.2 percent on worries over a new bill on the restructuring of the state-owned Philippine Amusement and Gaming Corp.