Stocks retreated from a two-day climb, as concern about the finances of Germany’s biggest lender curbed risk appetite.
The Philippine Stock Exchange index, the 30-company benchmark, fell 85 points, or 1.1 percent, to close at 7,629.73 Friday. Total gains this year were reduced to 9.7 percent.
The broader all-share index, also lost 40 points, or 0.9 percent, to settle at 4,533.24 on a value turnover of P13.6 billion. Losers overwhelmed gainers, 119 to 65, while 45 issues were unchanged.
Two of the 20 most active stocks ended in the green, led by BDO Unibank Inc. which climbed 1.7 percent to P109.80. SM Investments Corp. rose 0.5 percent to P673.50.
Meanwhile, Asian markets tumbled Friday, tracking a sell-off in New York as worries about the future of German banking giant Deutsche Bank hammered financial stocks.
A Bloomberg report that several hedge funds had withdrawn their investments in the lender over worries about its viability after US authorities slapped it with a $14-billion penalty over its sale of mortgage-backed securities prior to the 2008 financial crisis.
There are fears the fine could batter the already fragile firm, fueling talk that it would become another Lehman Brothers, the Wall Street titan whose downfall precipitated the global downturn six years ago.
AFP sources knowledgeable of the situation confirmed 10 funds had pulled funds out, but the bank said the report gave an overly negative view of the situation, noting it still had some 800 funds as customers who understand its “stable financial position”.
Deutsche Bank plunged almost seven percent in New York and shed even more in early Frankfurt trade Friday.
The losses were reflected in Asia, with Japan’s Mitsubishi UFJ Financial Group diving more than two percent and HSBC down more than one percent in Hong Kong. Sydney-listed Commonwealth Bank sank 1.5 percent and Westpac lost 1.4 percent.
“Deutsche certainly weighs on sentiment, and the declines are concerning,” James Woods, a strategist at Rivkin Securities in Sydney, told Bloomberg News.
“Being named the number one bank for global systemic risk, it’s entwined with everyone.”
The sell-off dragged broader markets down, a day after an oil-fueled rally following OPEC’s surprise announcement that it would cut production.
Tokyo ended down 1.5 percent, while Hong Kong was 2.1 percent off in the afternoon, Sydney fell 0.7 percent and Seoul lost 1.2 percent. Singapore tumbled more than one percent and there sharp losses in Taipei and Manila.
However, Shanghai rose 0.2 percent ahead of a week-long national holiday.
In early European trade London sank 1.3 percent, Paris lost 1.6 percent and Frankfurt was 1.5 percent lower.
The losses followed falls on Wall Street, where traders ran for cover as they brushed off data showing US second-quarter economic growth figures beat forecasts.
The unease spread into currency markets, with high-yielding — riskier — units fell against the dollar as dealers looked for safety.
South Korea’s won fell 0.2 percent, the Indonesian rupiah lost 0.3 percent and the Australian dollar slipped 0.6 percent. With AFP, Bloomberg