The stock market plummeted Wednesday as the turmoil in Italy sparked a frantic dash for safety, with blue-chip issues leading the retreat.
The Philippine Stock Exchange Index tumbled 132.22 points, or 1.7 percent, to 7,470.14 on a value turnover of P7.4 billion. Losers overwhelmed gainers, 132 to 56, with 49 issues unchanged.
Metropolitan Bank & Trust Co., the second-biggest lender in terms of assets, slumped 4 percent to P79, while Bank of the Philippine Islands, the third-largest, also lost 4 percent to P96.
Aboitiz Equity Ventures Inc., which is into power generation and retail, banking, infrastructure and flour milling, declined 3.8 percent to P59.45, while JG Summit Holdings Inc. of John Gokongwei dropped 3 percent to P57.20.
The rest of Asian equities tumbled Wednesday while the euro was stuck around 10-month lows Wednesday, while investors have also been spooked by fresh worries about the China-US trade row.
Regional investors tracked big losses Tuesday in Milan, Madrid and other European and US markets.
Tokyo ended 1.5 percent down, Hong Kong lost 1.6 percent and Shanghai was 2.5 percent lower. Sydney gave up 0.5 percent, Singapore dived 1.9 percent and Seoul was two percent lower. Taipei and Kuala Lumpur were also sharply down.
Global markets have been sent into a tailspin as a political crisis unfolding in Rome has thrust the stability of the eurozone and European Union back on to the agenda.
“As the third biggest economy in the EU, as a heavily indebted one, and with Euroskeptics seemingly in the ascendancy markets have worried that the EU again faces an existential crisis,” Greg McKenna, chief market strategist at AxiTrader, said.
However, he added; “I’ll go out on a limb and suggest there are a bunch of experienced political operatives in Europe and some neophytes in Italy who might just have got the shock of their lives on how quickly this situation developed and we’ll see some backpedalling.”
Italy was plunged into crisis when President Sergio Mattarella at the weekend vetoed the nomination of a fierce euroskeptic as economy minister, leading the prime minister-designate to step down and upending a bid by the anti-establishment Five Star Movement and the far-right League to form a government.
Mattarella then named Carlo Cottarelli, a pro-austerity economist formerly with the International Monetary Fund, to lead a technocrat government, with another election likely in a few months.
The chaotic developments have spooked investors, who fear another election will essentially be seen as a referendum on the country’s future in the eurozone.
Adding to the selling pressure was a brewing crisis in Spain, where Prime Minister Mariano Rajoy faces a no-confidence vote after his party was found guilty of benefiting from illegal funds in a massive graft trial.
The euro dived against the dollar and yen Tuesday to lows not seen since mid-2017 and it extended the losses in Asian trade.