Local stocks finished sharply lower yesterday as worries persisted about the fallout from the Silicon Valley Bank (SVB) collapse.

The benchmark Philippine Stock Exchange Composite index fell below the 6,500 mark, closing 151.12 points or 2.31 percent lower at 6,393.33.

The broader All Shares index lost 64.35 points or 1.83 percent to finish at 3,454.48.

Analysts attributed yesterday's market decline to SVB contagion fears.

'There are concerns that our banks are also vulnerable to the same factors that led to the closure of SVB,' said April Lynn Tan, chief equity strategist at COL Financial.

First Metro Investment Corp. head of research Cristina Ulang likewise said the contagion fear in the US rooted in the recent bank closures is ruining sentiment and appetite for risk assets in emerging markets.

'Thus, the selldown in local equities as well,' she said.

Joseph Roxas, president of Eagle Equities, said the market shrugged off the notion that the US Federal Reserve may slow down its rate hikes.

The ongoing P1.6 billion initial public offering of Alternergy is also siphoning out the market's buying power, he said.

Total value turnover reached P6.775 billion. Market breadth was negative, 143 to 49 while 47 issues were unchanged.

All the sectoral gauges were down with holding firms and property among the biggest decliners.

Meanwhile, Asian shares declined yesterday, with heavy selling of banks shares in Tokyo and some other markets, as investors around the world watched to see what's next following the second- and third-largest bank failures in US history.

Direct exposure to the risks from the US failures in Asia seemed slim, at least so far. Still, fears of contagion persisted, sending regional benchmarks lower across the region.

The heaviest pressure is on the regional banks a couple steps below in size of the massive, 'too-big-to-fail' banks that foundered in 2007 and 2008.

Huge banks, which have been repeatedly stress-tested by regulators following the 2008 financial crisis, weren't down as much.

 

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