Philippine bourse drops on investors' caution

The Philippine stock market suffered another huge drop on Monday as investors are becoming more cautious of the overbought situation of the local equities. The bellwether Philippine Stock Exchange index declined by 1.46 percent, or 83.26 points, to 5,623.85, while the broader all-share index slipped by 1.3 percent, or 48.01 points, to 3,640.37. Trading volume reached 2.9 billion shares worth 9.41 billion pesos (228.88 million US dollars) with 116 stocks declining, 50 advancing, and 50 were unchanged. All six counters closed in the negative, led by the financial subindex. "Continued softness prevailed early this week as investors weigh geo-political tensions in the peninsula," brokerage 2TradeAsia.com said in its daily stock market comment. Conflict between North Korea and South Korea resurfaced after North Korea's rocket launch. This has caused tension in the international community, with others calling for new sanctions on North Korea. 2TradeAsia.com said fiscal progress to resolve the deficit impasse in the US is also among the top concerns of investors. "Following the composite index's decline to slightly above the 5,700-mark on Friday, some investors might adopt a cautious mode prior to taking positions," 2TradeAsia.com said. Stocks in the 30-company index were among those heavily sold down by investors. These issues include SM Investments Corp, Alliance Global Group, Inc, and Ayala Land, Inc.