Market tumbles on weak copper, gold prices

Stocks fell for the third time in four days yesterday as Philex Mining Corp. and Lepanto Consolidated Mining Co., two of the country’s biggest metal producers, slid after copper and gold prices declined.

"Mining companies are very sensitive to metal prices," said Jovis Vistan, head of research at AB Capital Securities in Manila. "I don’t think the decline in metal prices is permanent.’’

The Philippine Stock Exchange Index lost 10.21, or 0.5 percent, to 2,181.57 at the noon close. Shares valued at P586 million were traded, 68 percent less than the six-month daily average. In the broader market, losers outnumbered gainers 42 to 20, with 59 stocks unchanged.

Philex Mining’s Class A shares, equity in the nation’s most profitable metal producer reserved for Filipinos, declined five centavos, or 1.3 percent, to P3.95, extending a two-day, 2.4-percent loss. Philex Mining’s Class B shares, which have no ownership restrictions, lost 10 centavos, or 2.5 percent, to P3.90, after losing 3.6 percent in the past three sessions.

Copper prices fell in Shanghai, London, and New York on speculation its demand may weaken as China, the world’s biggest user of the metal, adopts more measures to slow economic growth. Copper for September delivery fell as much as the maximum daily limit of five percent to 65,640 yuan ($8,203) a metric ton on the Shanghai Futures Exchange.

Separately, gold yesterday fell 3.4 percent to $629.50 an ounce on the New York Board of Trade, its biggest decline since July 13, on speculation the US will continue raising rates, making the metal less attractive as a hedge against inflation and a declining dollar.

Lepanto’s Class A shares lost three centavos, or 10 percent, to 26, extending a 3.3-percent loss yesterday and its biggest decline since May 23. Its Class B shares declined three centavos, or 9.1 percent, to 30, the first slide in three days.

The Manila-based company separately said that it will sell P639 million worth of shares to stockholders to pay debt.

Although oil was easier overnight, it picked up again in Asian trade as Israel launched new attacks into Lebanon amid concerns over a possible widening of the Middle East conflict, they said.

"There is an air of cautiousness which will likely remain as investors wait for a resolution of the stand-off in the Middle East," said Mark Alan Canizares of CitisecOnline.com.

Dealers expect risk-averse investors to remain sidelined amid the geo-political worries but there may be some bargain hunting, especially those companies that are expected to report strong earnings for the second quarter.

Philippine Long Distance Telephone Co. (PLDT) was the top-traded stock, ending down P15 at P1,825. – AFP