By Arra B. Francia, Reporter
Local shares surged on Tuesday, June 5, as investors cheered the lower-than-expected inflation data for the month of May.
The 30-company Philippine Stock Exchange index jumped 1.40% or 106.15 points to close at 7,685.76. The all shares index likewise climbed 1.06% or 49.11 points to 4,664.29.
“We’ve been watching the market and technically it was oversold for the past few weeks…People were worried about how inflation was going to be, because oil prices went up and that’s inflationary pressure. But with the numbers out now and they are lower than expected, then it is good,” Summit Securities, Inc. President Harry G. Liu said in a phone interview.
The Philippine Statistics Authority reported that the general increase in prices of widely-used goods and services accelerated by 4.6% in May. While this is a fresh five-year high, it is lower than the Department of Finance’s 4.9% forecast, and was at the lower end of the local central bank’s 4.6-5.4% target range.
Mr. Liu noted that inflation is expected to slow down should oil prices in the world market go down as well.
“Thinking ahead, if oil prices go down and it will technically go down which I expect to be $60, if that happens, then the market will appreciate that,” the analyst said.
Aside from inflation, Regina Capital Development Corp. Managing Director Luis A. Limlingan also attributed the main index’ increase to the positive sentiment in the US.
“Philippine stocks rallied as the US counterparts did as traders appeared to shrug off global trade tensions and focused on a favourable economic backdrop instead,” Mr. Limlingan said in a mobile message.
Locally, all sectoral indices ended in positive territory, led by holding firms which recorded a 2.32% uptick or 173.08 points to 7,650.95. Services followed with an increase of 1.58% or 23.38 points to 1,502.62, while mining and oil went up 1.11% or 111.34 points to 10,152.53. Industrial rose 0.92% or 98.43 points to 10,756.26; financials gained 0.83% or 15.50 points to 1,887.77; and property added 0.06% or 2.21 points to 3,802.02.
A total of 1.98 billion issues switched hands valued at P5.41 billion, flat from Monday’s P5.48-billion turnover.
Advancers outpaced decliners, 112 to 84, while 53 issues were unchanged.