Philippine shares fall on heels of global markets

Shares on the Philippine Stock Exchange fell in moderately active trading Thursday, hounded by a sell-off in most overseas markets after US Federal Reserve Chairman broadly hinted overnight that the American economic recovery remains too weak. The PSEi lost 105.06 points or 2.73 percent to close at 3,738.31. This was the index’s biggest point loss since May 5, 2010 when it slid by 113.83 points, and the largest percentage drop since May 25, 2010 when the market fell by 2.8 percent, according to PSE data. More than 1.713 billion shares valued at P6.347 billion changed hands during the two-hour-and-forty-minute session. Losers led gainers 126 to 19 with 30 issues unchanged. PSE president and CEO Hans B, Sicat said in an emailed statement, “the decline in the PSE index was in reaction to the drop in Asian equities as well as concerns over the global economy." (See: GLOBAL MARKETS: Asian stocks slump, dollar subdued after cautious Fed) In explaining what happened to the market, Sicat identified a confluence of events that influenced Philippine shares in a negative way. “There have been a number of inter-related factors during the last few weeks. Federal Reserve Chairman Ben Bernanke suggested US economic conditions were still too weak for the central bank to pull back on its vast monetary stimulus program." On this side of the globe, the PSE president pointed at the macroeconomic situation is China. “Asian equity markets, likewise, responded negatively to China’s move to raise interest rates." “Also, there is the global threat of higher inflation on rising global commodity prices. The tensions in the Middle East also seem to contribute to oil and commodity price fears," Sicat observed. “We hope this is just a temporary trend and that investors continue to see the investment opportunities unique to each market," Sicat also said. — VS, GMANews.TV