Local stocks fall; Japan disasters spook investors

MANILA, Philippines (Xinhua) – The aftermath of the disasters that hit Japan last week continue to affect investors sentiment, sending the Philippine shares diving on Tuesday.

The bellwether Philippine Stock Exchange index failed to sustain its intra-day rally and slipped by 0.57 percent or 22.39 points before the final bell.

The composite index settled at 3,896.31, while the broader all- share index was also down by 0.67 percent or 19.63 points to 2,907. 64.

Trading volume reached 2.29 billion shares worth 5.25 billion pesos (122 million U.S. dollars) with 102 stocks declining, 35 advancing and 36 were unchanged.

Of the six counters, only the holding firm sector bucked the trend.

DBP-Daiwa Securities, Inc. said markets across Asia ended lower following the sharp drop in the Japanese stock market.

The Tokyo exchange posted Tuesday its biggest one day loss since 1987. The selldown was brought by reports that the nuclear crisis in this disaster-stricken country would worsen given threats of radiation contamination.

Analysts said the crisis in Japan and the rising tension in the Middle East might dent the inflow of remittances to the Philippine remittances and its exports growth this year. But there are signs that the local market may have already discounted such effects.

"The benchmark index initially posted a 36.10-point rally only to lose all of it and end the day on the red at 3,896.31 mimicking the massive selling barrage witnessed in neighboring countries," DBP-Daiwa Securities said in its daily report.

What is remarkable though, DBP-Daiwa Securities said, is that foreign investors are still on bargain hunting mode. This means that they might be shifting back to emerging markets again.

Stocks in the 30-company index closed mixed. Alliance Global Group, Inc. and Metropolitan Bank and Trust Co. shed their value, while SM Investments Corp. and budget airline Cebu Air, Inc. closed higher. (report from Philstar.com)