Philippines share prices closed 3.8 percent lower, falling sharply on Friday as investors reacted with alarm to a massive overnight sell-off on Wall Street driven by US housing and credit market concerns, dealers said. Trading was also affected by technical problems, which caused two delays in the session.
The composite index lost 140.92 points to 3,518.76, its lowest finish since June 7, when it settled at 3,528.79. The broader all-share index fell 89.19 points to 2,283.23. Declines led gains 141 to 8, with 24 stocks unchanged. Turnover was of 5.4 billion shares worth 6.6 billion pesos (144.48 million dollars).
"The market followed the sell-down in major overseas markets. The decline on Wall Street is a signal that the US economy may be slowing down," said Gomer Tan of Regina Capital Development Corp Dealers believe that Wall Street's slump Thursday, stemming from increased fears that problems in the housing and credit markets are starting to spill over into the wider US economy, could be the beginning of a major correction which will impact global bourses.
Jovis Vistan of AB Capital Securities, however, saw Friday's local sell-off as a healthy, overdue correction given the record-setting run-up this year. "The correction will be good for the local market because this early, we are detecting problems in the US, and it is a good time to adjust some of the excesses in prices in both global and local markets."
Vistan noted that the main index has already breached his full-year forecast of 3,500 points in the first half and has touched a series of record highs. Ayala Corp shed 35 pesos to 525 and property unit Ayala Land fell 75 centavos to 16.50 pesos.
Megaworld Corp was down 20 centavos to 3.85 pesos while SM Prime Holdings gave up 75 centavos to 12 pesos. Philippine Long Distance Telephon lost 35 pesos to 2,625. San Miguel A ended a peso down to 73 while its B shares gave up 1.50 pesos to 74.50.
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