Lower inflation props up stocks amid security concerns

MANILA, Philippines - The lower inflation helped Philippine shares extend their gains for the second day on Tuesday with the market shrugging off the successive bombing incidents in Mindanao. The benchmark Philippine Stock Exchange index (PSEi) rose 22.66 points or 0.93 percent to 2,471.76 while the broader all-shares index jumped 13.98 points or 0.89 percent to 1,582.80. Market breadth was positive with 60 gainers against 34 losers and 52 stocks which closed unchanged. Five of the six sectors ended in the green, led by holding firms' 2.15-percent ascent and industrial 1.97-percent leap. Service index was the only sore spot for the day, slipping 0.061 percent. "Political concerns on the poll automation have been resolved and as an additional bonus, inflation was low," said Emmanuel Soller, EquitiWorld Securities trader. He noted a number of foreign brokers were selling various issues such as Manila Electric Co. (Meralco) following hoarding of shares of Metro Manila's power distributor. "The market has already discounted the anticipated rate cut by the BSP in its meeting this week. Based on graphical analysis, the PSEi still has an upward bias," he said. Inflation was recorded at 1.5 percent in June, the lowest in 22 years. In the foreign scene, US stocks ended mixed. While the Dow Jones industrial average and broader S&P 500 were up, tech-heavy Nasdaq declined. Majority of the Asian bourses were trading in the green led by Indonesia, Taiwan and Singapore's. However, stock markets in Japan, Malaysia and Australia were trading lower. On the local front, several bombing incidents in the southern island of Mindanao since Sunday have killed and wounded a number of civilians, with authorities still investigating who was responsible for the attacks. Despite these security issues, Soller said players were more likely enticed to snap up stocks considered to be at bargain prices. Telecommunications giant Philippine Long Distance Telephone Co., the day's most active stock, was flat at P2,365. Meralco, the country's largest electricity distributor, surged by P8 or 5.23 percent to P161. Philex Mining Corp., one of the Philippines' largest miners, gained P0.10 or 1.35 percent at P7.50. Metropolitan Bank & Trust Co., one of the country's largest lenders in terms of assets, dipped P0.50 or 1.56 percent to P31.50. Property giant Ayala Land Inc. was steady at P8.20. Volume traded, however, was lower with 832 million stocks worth P1.635 billion changing hands. GMANews.TV