Philippine stocks started the month of September on positive a note as banks and conglomerates continued to advance.
The 30-company Philippine Stock Exchange index added 25.87 points, or 0.38 percent, to close at 6,923.41 Monday, while the wider all-shares index went up by 8.60 points, or 0.23 percent, to settle at 3,751.41.
Local shares were boosted by strong foreign buying, which reached P419.3 million.
Philstocks Financial Inc. research head Japhet Tantiangco said investor sentiments were driven by expectations that August inflation rate would continue to soften.
The Bangko Sentral ng Pilipinas earlier said inflation in August might have slowed between 3.2 percent and 4 percent, softer than the 4.4 percent recorded in July.
Tantiangco said investors also took cues from Wall Street’s last week’s close.
Value turnover reached P4.08 billion despite several private and public institutions suspending work due to typhoon Enteng.
Holding firms rose the most among the sub-indices, rising by 1.27 percent. This was followed by services which climbed 0.89 percent and financials by 0.56 percent.
Mining and oil declined by 2.28 percent, while property and industry slipped by 0.98 percent and 0.39 percent, respectively.
Meanwhile, Asian and European markets were mixed Monday, with optimism over an expected US interest rate cut offset by worries over the Chinese economy following the release of more disappointing data.
Figures on Friday showed the Federal Reserve’s favored gauge of inflation — personal consumption expenditures index — fell in line with forecasts in July, setting the bank up to ease monetary policy this month.
Focus is now on the release of the closely watched non-farm payrolls report, which will provide the latest snapshot of the world’s top economy.
While a cut has been priced in, the data could determine how big it will be, with analysts saying another big miss to the downside could prompt officials to slash rates by 50 basis points, rather than the expected 25.
A well-below-forecast reading last month fanned fears of a recession and sparked a rout across equities, though figures since then have soothed those concerns.
“The spending data continues the run of indicators suggesting that fears the rise in the unemployment rate signaled an imminent turn down in activity are misplaced,” said Taylor Nugent at National Australia Bank.
“But inflation data remains permissive should the Fed need to respond more assertively on the labour market.
“That leaves the focus squarely on payrolls on Friday as the key indicator ahead of the September 18 (rate) decision.”
He said markets had priced in 100 basis points of cuts by the end of the year.
After a strong finish on Wall Street, where all three indexes ended sharply higher, Asia struggled to match up.
Tokyo, Sydney, Singapore, Seoul, Mumbai, Manila, Wellington and Jakarta rose but Hong Kong, Shanghai, Bangkok and Taipei fell.
London, Paris and Frankfurt all fell in the morning.
Investor sentiment was jolted by worries over China’s economy after a report showed activity in the country’s manufacturing sector contracted for a fourth consecutive month in August and more than expected.
The news comes as leaders face calls to unveil fresh stimulus measures, particularly for the troubled property industry, with observers warning the government’s 5 percent GDP growth target could be missed this year.
“The world’s second-largest economy is sputtering, with factory activity lagging, deflationary pressures mounting, and the call for stimulus growing louder,” said independent analyst Stephen Innes.
“The services sector tried to pick up the slack, but growth there is almost invisible… signaling an economy barely managing a pulse.”
Meanwhile, oil prices extended last week’s big losses sparked by reports that OPEC and other key producers will press ahead with a planned increase in output from next month.
That has helped offset worries about tensions in the Middle East and Libyan supply disruptions. With AFP
