Stock market sinking further today on unfavorable external developments

MANILA, Philippines (Xinhua) - The Philippine stock market bucked the performance of the foreign equities, sinking further on today as external developments remain unfavorable.

The bellwether Philippine Stock Exchange index dived by 3.41 percent or 211.12 points to 5,971.05, while the broader all-share index retreated by 3.52 percent or 134.34 points to 3,686.58.

Trading volume reached 2.92 billion shares worth P8.59 billion ($195.71 million) with only 17 stocks advancing, 165 declining and 34 were unchanged.

All six counters were down.

Analyst Justino Calaycay of Accord Capital Equities Corp. said a 40-point rebound in the Dow Jones and a similarly marginal rise in the broader Standard & Poor 500 last Friday failed to lift investors' sentiments on today.

Calaycay said investors' attention this time shifted to the growing weakness of the Chinese economy further depressing prices in early trades.    

"Bears kept its dominance threatening to wipe out all the gains for the year-to-date," Calaycay said.

Recent reports are suggesting that the credit market of China, the world's second-largest economy, might already be freezing up.

This and the development in the U.S. sent investors selling their positions in an almost complete reversal of the market's performance when the year opened.

"Admittedly, it would not be easy for the general investing public to be convinced to buy the bargained stocks (given the recent performance of the local equities)," Calaycay said.

This, he said, suggests a "wider disconnect" between investors' perceptions - as reflected in the prices- and the fundamentals of the local economy.

Except for Aboitiz Power Corp. which closed flat, all 19 most actively-traded stocks closed in the negative on today.

The top five most active stocks that were sold down were heavyweight Philippine Long Distance Telephone Co., Metropolitan Bank and Trust Co., Alliance Global Group, Inc., SM Prime Holdings, Inc. and Ayala Corp.