Stocks close higher on inflation surprise

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The benchmark stock index posted its eighth high for the year on Friday, ending with nearly 1 percent gain as the market welcomed a better-than-expected inflation figure for August.

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The Philippine Stock Exchange index (PSEi) rose 0.83 percent or 59.47 points to finish the week at 7,263.58, just off an intraday high of 7,264.87. It also topped the previous closing high for the year of 7,206.02, hit on Wednesday.

The wider All Shares index added 0.79 percent or 33.47 points to close at 4,290.36.

Freya Natividad, investment analyst at online brokerage firm 2TradeAsia.com, said the market’s strong rally was “backed by lower-than-expected inflation” and positioning by companies “for a better outlook in 2015.”

The Philippine Statistics Authority announced during the morning session that the August headline inflation rate stood at 4.9 percent, unchanged from July.

Summit Securities President Harry Liu said over the phone that the market was up due to the absence of negative news domestically and internationally.

“It is a technical upward movement, there’s a lack of negative reports,” Liu said.

Among the most actively traded stocks, gainers were led by the Bank of the Philippine Islands, up 0.32 percent or P0.30 at P95.50; Universal Robina Corp, up 1.15 percent or P2 to close at P176; and Ayala Land Inc., up 3.17 percent or P1.05 to end at P34.20.

Philippine Long Distance Telephone Co. (PLDT) was the sole loser among the 10 most actively traded stocks, as investors opted to take profit following previous gains from the MSCI rebalancing, Liu said.

PLDT lost 1.10 percent or P38 to close at P3,422 per share.
Besides PLDT, the most actively traded stocks included GT Capital Holdings Inc., which was flat at P970.

Among the subindices, the services sector was a casualty of PLDT’s decline, dropping 0.30 percent or 6.85 points to 2,252.64. The rest of the sector indices rose: Financials gained 0.58 percent or 9.66 points to 1,661.36; industrials advanced 0.91 percent or 101.99 points to 11,286.58; holding firms climbed 1.11 percent or 69.85 points to 6,369.83; mining and oil added 0.98 percent or 174.58 points to 17,987.57; and property jumped 1.79 percent or 48.76 points to close at 2,767.23.

Total volume was at 1.122 billion shares, valued at P11.4 billion. Advancers outnumbered decliners, 111 to 67, while 49 shares were unchanged.

Natividad and Liu both predict that investors may cash in on gains in the next few days, leading the market into a consolidation phase. But the two analysts said the market’s long-term momentum is still intact, and can be expected to continue rising through the end of the year.

On Thursday, the PSEi was positive in morning trade and reached as high as 7,220.51, before settling with a 1.91 percent loss to close at 7,204.11. The All Shares index edged up 0.09 percent or 3.90 points to close at 4,256.89.

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