Shares close 1.6 percent lower due to Wall Street losses

MANILA (AFP) - Philippine share prices closed 1.6 percent lower Wednesday at their weakest finish in four weeks as investors took heavy losses overnight on Wall Street as their cue to take profits, dealers said.

The composite index lost 60.73 points to 3,645.51, off a high of 3,706.24.

It was the lowest closing level since June 28, when it settled at 3,642.73.

The broader all-share index fell 38.05 points to 2,368.52.

Decliners outnumbered gainers 109 to 19, with 48 stocks flat.

Turnover was 3.5 billion shares worth 5.5 billion pesos (122.19 million dollars).

Ron Rodrigo of Unicapital Securities said: "The local market is dependent on the US market and today's big decline mirrored the negative sentiment in US equities."

He said the selling here had been accelerated as investors began to fully digest a recent comment by Fitch Ratings, which cast doubt on the government's ability to keep its budget deficit this year below its own ceiling of 63 billion pesos after a poor fiscal performance in the first half.

"Investors are being very cautious right now and negative leads such as that of Fitch Ratings are sinking in fast, making investors jittery and jumping at the chance of realizing their gains," Rodrigo said.

Chase Yap of online broker 2TradeAsia said investors were worried about the repercussions if the government failed to address its fiscal problems.

"It could affect the country's credit standing and that would erase the stability the market is currently enjoying," he said.

The biggest decliners included shares in two subsidiaries of conglomerate Ayala Corp. Ayala Land shed 75 centavos to 17.50 pesos and Bank of the Philippine Islands was down two pesos to 68.

Ayala Corp. gave up five pesos to 565.

SM Investments was down 10 pesos to 427.50.

Philippine Long Distance Telephone fell 10 pesos to 2,645.

San Miguel A lost 50 centavos to 74 pesos while San Miguel B dropped 3.50 pesos to 78.