Philippine share prices on Wednesday caught up with the two-day slide of global equities on the back of renewed fears on the European financial crisis.
At the Philippine Stock Exchange, the composite index dropped 73.31 points, or 1.69 percent to 4,260.41, while the broader all-shares index fell 40.27 points, or 1.34 percent to 2,964.64.
Decliners dominated advancers, 112 to 30, while 21 stocks were unchanged. A total of 4.68 billion shares worth P4.69 billion changed hands.
“It’s a post-Halloween reaction to what’s happening in Greece,” said Astro del Castillo, managing director at First Grade Finance Inc.
Overnight, the Dow Jones Industrial Average fell 297.05 points, or 2.5 percent, to close at 11,657.96. The Dow has lost 573 points, or 4.7 percent, in the last two days after the prime minister of Greece submitted the European rescue plan, inclusive of general agreements among the 27-member eurozone, to a popular vote.
“It’s expected to face rough sailing, with the people possibly rejecting budget austerity measures, including cuts in social benefits,” said Jun Calaycay of Accord Capital Equities Corp.
A Greek default may drag Europe into recession, hurting major markets like the US, where growth remains sluggish.
While the European concern continues to weigh heavily on markets, the summit’s output was a step in the right direction.
“Notwithstanding growing opposition among the Greece population, its viability is not diminished . . . At the end of the day, they may have to bite the proverbial bullet, or less graphically, swallow the bitter pill,” Calacyay said.
The local market may continue to feel the “minimal” impact of Europe’s financial crissi for the rest of the shortened-trading week.
“Expect to see a less active market reacting accordingly to the news abroad. We’ll see if corporate earnings can somehow shoo off the ghost of Europe,” del Castillo said.
“The domestic economic outlook continues to be positive, but growth numbers are seen to be significantly slower than earlier estimated,” Calaycay said.
