Stocks dived on lack of positive developments

MANILA, Philippines (Xinhua) - The stock market dived today as investors grope for positive developments that could support any rally.

The bellwether Philippine Stock Exchange index slashed off 2.15 percent from Monday's performance to close the session at 5,886.01 or a lost of 129.29 points. The broader all-share index also retreated by 1.82 percent or 66.61 points to 3,589.82.

Trading volume reached 1.13 billion shares worth P6.74 billion ($148.36 million) with 133 stocks declining, 29 advancing, and 30 remaining unchanged.

All six counters fell, especially the property sector which lost as much as 3.44 percent of its value.

Analyst Gregg Adrian Ilag of AB Capital Securities, Inc. said the US Federal Reserve's decision to maintain the pace of reducing its monetary stimulus last week continue to cause anxiety among investors.

"Investors were anticipating that the Fed would delay additional tapering given the capital flight that the emerging markets are experiencing. Emerging market currencies have been falling relative to the dollar," Ilag said.

Moreover, the fact that the Philippine economy grew at a slower pace last quarter has left local investors with nothing to bank their optimism on.

The Philippine economy grew at 7.2 percent last year, which was better than the 7 percent estimate. Fourth quarter growth however was at 6.5 percent only, slower than the 7 percent growth in the fourth quarter of the previous year.

"For now, investors will likely speculate and change their view on the pace of the quantitative easing tapering if payrolls do not improve significantly from the December results which was the lowest since May 2011," Ilag said.

The weakness of emerging market currencies, however, is starting to raise concerns that we are seeing a repeat of the crisis in 1997.

All actively traded issues fell. Among the heavily battered were Ayala Land, Inc., SM Prime Holdings, Inc., and DMCI Holdings, Inc.