PSEi plunges 2.4% amid global fallout from US credit downgrade

Tracking the huge sell off in Asian markets following the credit downgrade of the US, Philippine share prices plunged 2.4% on Monday. The benchmark 30-company Philippine Stock Exchange index plunged 106.31 points or 2.39 percent to 4,331.24 while the all shares tumbled 61.11 points or 2 percent. “The Philippine market has reacted alongside other Asian markets to the latest credit downgrade by Standard & Poor’s of the United States. The news has sent shivers across global financial markets and the Philippine market has behaved very much like its Asian and ASEAN neighbors - with a wave of consolidation. We will have to see whether markets will settle at these levels and stabilize. On a more positive note, S&P’s latest action should spur the US to further improve finances and restore its credit rating," PSE President and Chief Executive Officer Hans B. Sicat said. Market breadth was negative with 132 losers against 22 gainers and 33 stocks that closed unchanged. All six sectoral indices retreated, with Holding Firms sliding 3.22 percent and Property slumping 2.96 percent. Volume traded reached 6.44 billion valued at P6.91 billion. In a market outlook posted online, Claire Quiray of Regina Capital said that both technical and fundamental factors pulled share prices lower. "For the coming week, share prices might further decline based on the signals coming from momentum indicators...Nagging uncertainties that the US economy is weakening was still the underlying factor of the market's edginess," Quiray said. Standard & Poor's downgraded the credit rating of the US with a negative outlook, signaling another possible credit cut in the future. Besides the debt crisis in the Eurozone, the unresolved economic and fiscal issues of the US heightened fears of another global recession. Asian markets clearly indicated this sentiment, with all bourses trading significantly lower. Leading the decline was the main index in South Korea with over six percent fall. Other indices were trading at a discount of between 2.24 percent and 4.98 percent. In the local bourse , four of the five most active stocks for the day closed in the red. Zeus Holdings Inc., the day's top traded, bucked the decline and rose P0.02 or 1.61 percent to P1.26. Diversifying conglomerate San Miguel Corp. slipped P3.90 or 3.17 percent to P119.10. Andrew Tan-owned Alliance Global Group Inc. slid P0.54 or 4.80 percent to P10.72. Metropolitan Bank Trust Co. shed P3.15 or 4.13 percent at P73.05. Lepanto Consolidated Mining Co. lost P0.02 or 1.57 percent at P1.25. -- CMA/OMG, GMA News