By Lawrence Agcaoili (The Philippine Star)

MANILA, Philippines - Local share prices resumed their downtrend yesterday, reflecting renewed concerns over the European debt crisis and Wall Street’s overnight slide on fresh worries about the global economic outlook.

At the Philippine Dealing System (PDS), the peso broke into the 47 to $1 level, weakening by another 54 centavos to close at 47.100, its lowest level in six months. The peso opened at 46.690 before hitting a high of 46.690 and a low of 47.110 to $1.

Total transaction amounted to $1.601 billion, up sharply from Monday’s $717.2 million.

Analysts said investors rushed to the exits on fears that a debt contagion is inevitable, following reports that Spain’s central bank took over long-established regional savings bank CajaSur. This came after the European Union ministers agreed last week on several billions of dollars bailout package for debt-saddled Greece.

Bangko Sentral ng Pilipinas Deputy Governor Diwa Guinigundo earlier told reporters that the equities as well as foreign exchange markets worldwide are “significantly wild” on account of increased risk aversion on questions of the sufficiency of the rescue plan as well as the ability of European countries to adopt austerity measures to pursue fiscal consolidation.

Guinigundo believes that the jitters in the market are short term and are driven by market sentiments.

“But once some certainty is seen by the market then we expect risk aversion will normalize or stabilize and market volatility will also subside, then we should start seeing more stability more normal movement in the peso against the US dollar,” he stressed.

“What we are just seeing today are volatilities which to my mind are short term volatilities. These are driven by market sentiments and as far as emerging markets particularly the Philippines we should not be seeing this kind of volatilities for a long time because our macroeconomic fundamentals continue to be strong and very resilient,” Guinigundo said.

On Wall Street, the Dow Jones Industrials ended at a three-month low on Monday, as a bigger-than-expected increase in home sales was overshadowed by nervousness about global economic recovery.

The Dow Jones Industrial average lost 126.82 points to end at 10,066.57, extending last week’s massive losses.

The main index of the PSE declined by 2.8 percent or 88.7 points to 3,102.59. The broader all-share index lost by 2.2 percent or 44.75 points to 1,973.85.

All sub-indices finished in negative territory, with services and holding sectors, down the most as both slipped by more than three percent.

Market breadth was bearish, with decliners thumping advancers 114 to 13, while 39 issues were unchanged.

A total of 3.87 billion shares worth P4.21 billion changed hands. A quarter of that amount was accounted for by conglomerates Ayala Corp. and SM Investments.

Ayala Corp., led by the Zobel group, lost 1.5 percent to P320 per share.

SM Investments, the holding company of businessman Henry Sy, gave up 4.5 percent to P372.50.

Sector leader Philippine Long Distance Telephone Co., shed 3.9% to P2,360 per share.

Traders said that sentiment on PLDT was also weighed down by expectations that its subscriber base will not increase substantially this year.

There was one block sale in PLDT which amounted to P324 million.

Shares in power distributor Manila Electric Co. were volatile. The stock seesawed through much of the session before ending lower by 0.6 percent at P168.

At the annual stockholders meeting, Meralco Chief Executive Officer Manuel M. Lopez said he will step down on July 1 as CEO and hand over the reigns of the

company to businessman Manuel V. Pangilinan. Lopez will remain as Meralco’s chairman.

Pangilinan’s group that includes PLDT and Metro Pacific Investments Corp., controls 41.4 percent of Meralco. Pangilinan’s bloc acquired a stake in Meralco last year. Only 6.6 percent of Meralco is owned by the Lopezes.