Fears over China slowdown dampen stocks

Philippine stocks tumbled yesterday as more evidence of a slowdown in China raised concerns that its economy might not have the momentum needed to help sustain a global recovery.

The main Philippine Stock Exchange index fell 64.30 points or 1.26 percent to close at 5,037.94.

A total of 3.91 billion shares valued at P6.74 billion were traded in the morning and afternoon sessions.

Losers led winners 102 to 73, with 42 issues closing unchanged.

 “Profit-taking and fears of a China slowdown and negative sentiments from Wall Street” moved the market, said Jonathan Ravelas, chief market strategist of BDO Unibank.

On Wall Street, the Dow Jones industrial average fell 0.5 per cent to 13,170.19. The Standard & Poor’s 500 eased 0.3 per cent to 1,405.52. The Nasdaq composite index slipped 0.1 per cent to 3,074.15.

Worries over the pace of the slowdown in the world’s No. 2 economy were fueled by comments Tuesday from mining giant BHP Billiton, which warned that Chinese demand for iron ore – used to make steel – was flattening.

In another sign of cooling growth in the world’s No. 2 economy, new home prices dropped in 45 Chinese cities in February as the government implemented measures to cool property speculation.

China’s economy grew at an annual rate of 8.9 per cent in the last three months of 2011, but the government, which wants to reduce reliance on exports and investment, has set a growth target of 7.5 percent this year. The lower growth target has made investors nervous, analysts said.

“The economic growth slowdown in mainland China is still the major concern,” said Linus Yip, strategist at First Shanghai Securities. “The inertia is quite obvious.”

In Japan, export-reliant companies like Toyota Motor Corp. felt pressure as the dollar gave up some of its recent gains against the yen. The Nikkei 225 index fell 0.4 per cent to 10,086.50.

South Korea’s Kospi index dropped 0.6 per cent to 2,029.58.                                           – AP