Index dips as regional markets drop after Nokor’s nuclear test

Share prices closed 0.32 percent lower Monday with investors taking profits as regional markets dropped on news of North Korea’s nuclear weapons test, dealers said.

Gains in Philippine Long Distance Telephone Co. (PLDT) on hopes that the telecom giant will report better third-quarter earnings helped limit the downturn, they said.

The composite index shed 8.30 points at 2,551.92 after trading between 2,549.92 and 2,572.22.

The broader all-share index fell 6.70 points to 1,567.25.

Losers led gainers 55 to 28 with 57 unchanged.

Turnover was 872.84 million shares worth P3.051 billion.

"Investors were a bit cautious after North Korea’s nuclear test," said Mark Alan Canizares of CitisecOnline.

Defying international appeals and threats of sanctions, North Korea announced it had carried out its first nuclear weapons test Monday.

Unlike other bourses in the region which suffered deeper losses, the impact of Pyongyang’s announcement on the Philippine market was "muted given our good macro-economic story," said Canizares.

Dealers say the market will probably consolidate at current levels and wait for fresh catalysts before moving to new peaks.

"Our index target of 2,700 is unchanged," said Gilbert Lopez of Macquarie Research. He said gains will likely be led by telecommunications and real estate firms which should benefit from declining domestic long-term interest rates through reduced interest payments and higher sales.

Top-traded PLDT advanced P20 to close at P2,200.

SM Investments Corp. fell P2.50 to P257 and unit Banco de Oro retreated 50 centavos to P41.50.

Property developer Ayala Land Inc. was down 50 centavos at P13.75.

Food and beverage firm San Miguel Corp.’s A-shares were steady at P65.50 while its B-shares eased 50 centavos to P76.50.

The Philippine stock market is taking a pause to assess the impact of the nuclear test within the region," said Rico Gomez, who helps manage about $1 billion at Manila-based Rizal Commercial Banking Corp. "We may see a bigger drop when we know how the big Asian markets will react."

"North Korea’s test is a global concern," said Grace Cerdenia, head of research at 2TradeAsia.com in Manila. "This could hurt even Philippine stocks."

The US is consulting with Japan on what course of action to take, said Jeffrey Hill, a US Embassy spokesman in Tokyo.

The US cannot accept a nuclear North Korea, Assistant Secretary of State Christopher Hill said on Oct. 4. Hill is the US delegate to talks with North Korea involving China, Japan, South Korea and Russia to convince Kim Jong Il’s regime to end its nuclear arms program. – AFP