Philippine stocks plunge 6% as world markets fall

Philippine shares plunged more than 6 percent on Thursday, in tandem with markets around the world, as US subprime lending woes continue. Local analysts, however, say the drop is an "exaggerated correction." The Philippine Stock Exchange composite index dropped 188 points or 6.0067 percent to 2,942.31 percent while the all shares index lost 105.99 points or 5.28 percent at 1,901.86. Losers whipped gainers 143 to 6 while there were 13 unchanged stocks. Volume traded reached 5.55 billion valued at P4.98 billion. "This is an exaggerated correction. From a its all time high, the local market has already fallen 20 percent whereas Wall Street has only dropped 8 percent," Banco de Oro chief market strategist Jonathan Ravelas said. "This is probably the major correction everybody is waiting for." he added. Ravelas said the US subprime lending woes would probably ease by the end of the year, and calm world markets. But until then he said he expects markets to be volatile. "Subprime lending woes will ease towards the end of the year. Right now uncertainty lingers putting downward pressure (on share prices)," he said. The Dow Jones industrial average fell 167.45 points, or 1.29 percent, to 12,861.47 overnight, closing below 13,000 for the first time since April 24 and continuing a weeks-long pattern of triple-digit moves. In turn, Asian stocks fell Thursday morning, battered by the persistent jitters over U.S. housing loan problems and the possible damage to global financial markets. The benchmark Nikkei 225 index lost 2.60 percent to 16,047.46 points on the Tokyo Stock Exchange in the morning session, its lowest intraday level since last November. Wednesday, the index fell 2.19 percent to its lowest finish since Dec. 8. In South Korea, shares plunged more than 7 percent Thursday, catching up to regional losses after a mid-week holiday. The Korea Composite Stock Price Index was down 6.7 percent midday at 1696.85. In local trading, market heavyweight Philippine Long Distance Telephone Co. led the decline as it lost P195 or 7.9 percent at P2,270. Ayala Corp., the country’s biggest conglomerate, shed P15 or 3.47 percent at P417. Metropolitan Bank and Trust Co., the nation’s largest lender, slipped P3.50 or 6.60 percent to P49.50. Power distributor Manila Electric Co.’s B shares lost P9 or 10.23 percent at P79. Mall operator SM Prime Holdings fell P0.50 or P5 to P9.50. - GMANews.TV, with AP