Martial law expansion fears pull down market

MANILA, Philippines - Local stocks headed downwards yesterday, falling 30.82 points on growing concerns about the global economy.

The market’s decline was also attributed to fears that President Arroyo may expand martial law to cover the entire country in a bid to prolong her presidency which ends next year.

The main composite index broke under the 3,000 mark for the first time in the last four weeks, closing at 2,981.25 while the all-shares index declined by .8 percent or 15.64 points to 1,860.36.

The Dow Jones dived 104 points the previous night dragged by concerns on the economy following Fitch Ratings’ downgrade of Dubai World’s Nakheel and Greece credit scores.

Jun Calaycay of Accord Capital Equities Corp. said investors have grown wary over the world’s financial health with Japanese economy growing by just 1.3 percent as companies cut spending in the wake of the country’s   deepest post-war recession. The Japanese government unveiled an $81 billion stimulus package to support the economy.

Analysts said the sell-off was also triggered by concerns over President Arroyo’s declaration of martial law in Maguindanao province last week.

At the national level, its implication ‘’isn’t that strong, but hard to ignore,’’ Claire Quiray of Regina Capital Development said. ‘’It means anything can happen overnight.’’

Mrs Arroyo imposed martial law to quell what she said was a rebellion by a powerful Muslin clan accused of masterminding the political massacre of 57 people in Magindanao.

All six sub-indices went down, led by a 347 point drop of mining and oil.

There were 84 losers as against 28 decliners while 58 stocks were unchaged. A total of 2.35 billion shares worth P2.71 billion were traded.

Telecommunication giant Philippine Long Distance Telephone Co. shed 1.1 percent or P30 to P2,590 while power producer Energy Development Corp. fell 1.2 percent or five centavos to close at P4.25.