(Update) RP stock market halts trading after 10% fall

Source: abs-cbnNEWS.com

 

 

The Philippine Stock Exchange (PSE) halted trading past mid-trade on Monday after the key index plummeted over 10 percent.
At 11:23 a.m., the 30-company composite index, the barometer of price movements on the local bourse, tumbled 10.03 percent to 1,757.46 points.

This is the first time that the market implemented the "circuit breaker" rule, which aims to help investors digest any unsual market drop and restore normalcy in share trading.

Under this rule, the PSE will stop trading in all stocks for 15 minutes if the main index drops by at least 10 percent from the previous day's close.

The trading suspension can be employed only once in a trading day and will not be resorted to if the drop occurs 30 minutes or less prior to the market close.

Earlier, PSE president Francis Lim said steep market declines could be blamed on panic selling.

"The problem with panic selling is that investors are selling out of pure emotion rather than based on fundamentals. Almost every market crash is a result of panic selling," he said.

Other exchanges said to have already adopted a similar rule include the New York Stock Exchange, Nasdaq Composite, and bourses in Asian countries such as Malaysia,  Thailand, South Korea and Taiwan.