Stocks dropped for a third day, dragging the benchmark index to a new 20-month low, as investors expressed concern over the health of the global economy this year.
The PSEi, the 30-company benchmark of the Philippine Stock Exchange, lost another 43 points, or 0.7 percent, to close at 6,575.43 Friday, the lowest since it settled at 6,561.20 on April 4, 2014. The gauge was also down 5.4 percent this week.
The heavier index, representing all shares, also tumbled 26 points, or 0.7 percent, to close at 3,788.28, on a value turnover of P5.6 billion. Losers overwhelmed gainers, 131 to 40, while 46 issues were unchanged.
Only four of the 20 most active stocks ended in the green, led by Leisure & Resorts World Corp., which climbed 1.7 percent to P7.10; and JG Summit Holdings Inc., which advanced 0.8 percent to P67.10.
SM Prime Holdings Inc. rose 0.5 percent to P20.60, while Bank of the Philippine Islands added 0.4 percent to close at P82.
Meanwhile, Chinese equities bounced on another day of volatility across Asia as investors were panicked by Beijing’s attempts to stabilize its beleaguered markets, with fears growing the global economy could be teetering.
China late Thursday removed the “circuit breaker” mechanism blamed for fuelling sharp sell-offs that shuttered mainland markets early twice in the space of four days, provoking losses on trading floors from Asia to Europe and the Americas.
Authorities also set the central rate for the yuan currency marginally higher against the US dollar, ending eight days of falls. A decision to set it at a five-year low was one of the catalysts for hefty selling globally Thursday.
Friday’s initial response was positive, with reports saying Shanghai was given support by state-backed cash being used to prop up big-ticket firms.
The wild swings across Asia were reminiscent of the summer’s China-linked worldwide turmoil owing to increasing concerns about Beijing’s ability to control a slowdown in the world’s number-two economy.
“There’s not a lot of stability in terms of policy management in China,” said Matthew Sherwood, head of investment strategy at asset managers Perpetual in Sydney.
“They are very much making it up as they go… It causes large market volatility as people in markets don’t like uncertainty.”
Shanghai rallied more than two percent at the open before reversing course and falling two percent into the red. It closed up two percent but was down around 10 percent over the week. Hong Kong rose 0.9 percent in late trade. With Bloomberg, AFP
