PSEi falls on profit-taking after Spain's borrowing cost hits new record

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MANILA - (UPDATED 4:19 p.m.) The Philippine stock market on Tuesday succumbed to profit-taking after Spanish bond yields surged to dangerous levels.

At the Philippine Stock Exchange, the composite index tumbled 23.46 points or 0.45 percent to close at 5,240.28.

Leading the market's decline was the property sector, which lost 1.18 percent anchored on the weakness of Ayala Land Inc., which shed 2.6 percent.

Decliners beat advancers, 81 to 76, while 47 stocks were unchanged. A total of 1.62 billion stocks worth P5.19 billion changed hands.

"The market was mixed today with a downward bias largely because of profit-taking and some concerns with Spanish yields reaching levels seen as unsustainable," said Jose Vistan of AB Capital Securities Inc.

Yields of Spain's 10-year government bond rose to 7 percent, the level that prompted Greece, Ireland and Portugal to ask help from international lenders.

This dragged down the Dow Jones industrial average overnight, finishing 36.18 points or 0.28 percent lower to 12,736.29.

Local stocks swung from positive to negative through most of the session and kept within the narrow 20-point trading band until a late sell-off pulled the index.

The market is expected to move sideways for the rest of the week, taking its cue from developments in China, Europe and the United States. A "healthy correction" may drag the index to the 5,130 support level, Vistan said.

"On a standalone basis, the local economic fundamentals remain strong. We expect investors to trade with caution as they gauge the implications of external developments," said Natividad.

Actively traded stocks were Ayala Land, BDO, PLDT, Universal Robina and SM Prime.

Top gainers were LMG Chemicals, Asiabest Group, Island Information and Technology, while the biggest losers were Araneta Properties, F&J Prince and Metro Pacific Tollways.

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