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THE Philippine stock market and the peso fell sharply
Friday after a sell-off on Wall Street spooked financial markets
across Asia.
Local share prices closed lower
as investors reacted with alarm to a massive overnight sell-off on
Wall Street driven by United States 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. Friday’s drop was the third-biggest point loss for
the index in a single day this year. Before that, the biggest
single-day point loss happened when the index shrank by 263.84
points on February 28 or a day after the Chinese markets tumbled.
“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. The Philippines and the
rest of Asia consider the US as their top export market.
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. “The
market’s [recent] optimism could be considered a bit overdone;
even on the fiscal front the government set the bar too high but we
are still better off than where we were four years ago. The market
will eventually show its resiliency.”
In a statement, Francis Lim, PSE
president, said the local market just tracked a regional retreat in
stocks, which followed this time the fall in prices at the New York
Stock Exchange (NYSE). As of late afternoon Friday, the main indices
in Japan, Hong Kong, Taiwan, South Korea, Singapore, Malaysia,
Thailand, India, Indonesia and Vietnam also suffered losses ranging
from 1.7 percent to 4.3 percent compared to their respective levels
Thursday, he said.
Lim said the regional markets
retreated after the Dow Jones Industrial Average, the NYSE’s main
barometer, shrank by 2.6 percent as it closed 311 points lower than
its level the day before. It was the biggest single-day drop in
points of the Dow Jones since February 27.
“Notwithstanding what happened
today here and abroad, we remain confident that our market’s
fundamentals remain strong. Inflation remains tame, while government
reports about our growth performance look optimistic and reassuring
to investors,” he said.
 --with
AFP
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