Phl stocks fall after Spain gets downgrade

Local share prices tumbled yesterday, mirroring the drop in most Asian stocks after Spain, the fourth-largest euro economy, was slapped with a two-notch credit downgrade and the US earnings season opened with a whimper.

Standard & Poor’s downgraded Spain’s debt late Wednesday from BBB+ to BBB-, the lowest investment-grade level. S&P said the action was due to the country’s recession, high unemployment and social unrest, which limit the government’s options for reversing the country’s financial crisis.

At the Philippine Stock Exchange (PSE), the composite index dropped 16.13 points or 0.30 percent to finish at 5,353.47. Decliners edged out advancers, 81 to 74, while 52 issues were flat. A total of 15.92 billion stocks worth P5.58 billion changed hands.

Leading the market’s decline was the services sector, which fell 0.69 percent, with Philippine Long Distance Telephone Co. shedding 0.95 percent. The country’s biggest telecom company was the most actively traded stock along with SM Investments, Philex Mining, Ayala Land and Metro Pacific.

Top gainers were Philippine Tobacco, Greenergy and Vantage Equities, while the biggest losers were IPVG, Ionics and Araneta Properties.

In another sign of a worsening global slowdown, South Korea’s central bank cut its bench- mark interest rate and lowered economic growth forecasts for this year and next.

The turbulence from abroad dragged Asian stocks lower. Japan’s Nikkei 225 index fell 49.45 points to 8,546.78. South Korea’s Kospi shed 0.8 percent to 1,932.74. Australia’s S&P/ASX 200 lost less than 0.1 percent to 4,490.50. Hong Kong’s Hang Seng, however, rose 79.45 points to 20,999.10.

On Tuesday, the International Monetary Fund reduced its growth forecast for the world economy to 3.3 percent this year from 3.5 percent. Its forecast for growth in 2013 is 3.6 percent, down from 3.9 percent three months ago and 4.1 percent in April. Global growth concerns are weighing heavily on market sentiment.