RP stock index continues slide despite Wall Street gain

Local share prices continued to plummet on Tuesday, even as Wall Street posted a slight gain overnight as momentum shifted in favor of the reappointment of Federal Reserve Chairman Ben Bernanke. The Philippine Stock Exchange (PSE) index dropped by 0.41 percent or 12.26 points to close at 2,955.7 despite a 24-point rise in the Dow Jones industrial index overnight. The all-share index slid by 0.1 percent or 1.78 points to 1,887.25. "US banks are starting to collapse. Investors are getting pessimistic on the stability of the market," analyst Emmanuel Soller or Equitiworld Securities, Inc. said in an interview. Since the bulk of the funds in the local stock market are from overseas investors, a possible collapse of some US banks would surely affect local equities, he pointed out. US President Barack Obama's plan to limit banks' size and risky trading has spooked investors, but analysts say it would have only little effect on big institutions like JPMorgan Chase, Bank of America and Citigroup. On the local front, losers beat gainers 69 to 31, while 67 stocks were unchanged. A total of 1.29 billion stocks worth P2.64 billion were traded. Soller ruled out any major economic letdown on the local front, adding that Tuesday's drop was likely due to political bickering at the Senate. "There is no negative development in the local scene except for some political bickering on the C-5 road extension project and a possible failure of elections," the analyst said. Soller said increased spending during the election period would greatly improve corporate revenues. Five of the six subindices declined, led by mining and oil firms' 2.15-percent or 215.88-point drop to 9,839.79, followed by a 1.3-percent or 8.27-point slide of financial stocks. The property index also slipped by 0.71 percent or 7.21-points to 1,009.51, while industrial shares lost 0.45 percent or 19.91 points to 4,433.79. The service sector likewise declined by 0.07 percent or 1.04 points to finish at 1,527.17. Holding firms bucked the trend, gaining 0.27 percent or 4.18 points to 1,570.63. A stocks or Benguet Corp., the day's second-biggest gainer, went up by a fifth to P13. PNOC Exploration Corporation B shares, the no. 2 loser, lost more than a tenth to P25.