LOCAL SHARES rebounded on Monday as US stocks closed higher last Friday following disappointing retail sales and inflation data that triggered bets that the Federal Reserve may push back its planned interest rate hikes.

The local bellwether Philippine Stock Exchange index rose 0.61% or 48.60 points to end at 7,934.50 yesterday.

The broader all-shares index gained 0.36% or 17.19 points to 4,753.01.

“Philippine markets swung back to gains from Friday’s losses with US indexes closing Friday’s session higher from the mixed sentiments brought by corporate bank results and poor data on retail-sales and inflation — leading participants to suspect Fed is back on a dovish mind-set,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile phone message on Monday.

The Dow and S&P 500 hit record highs on Friday after weak economic data dulled prospects of more interest rate hikes this year.

Data showed consumer prices were unchanged in June and retail sales fell for a second straight month, pointing to tame inflation and subdued expectations of strong economic growth in the second quarter.

The Dow Jones Industrial Average was up 84.65 points or 0.39% to 21,637.74; the S&P 500 gained 11.44 points or 0.47% to 2,459.27; and the Nasdaq Composite added 38.03 points or 0.61% to 6,312.47.

“Indeed, the fundamentals need to validate price gains. Monday’s trades again highlighted the challenge prices meet as the index rises towards the 8,000 mark,” Philstocks Financial, Inc. said in its market report on Monday.

All sectors ended in the green except for financials which lost 0.03% or 0.62 points to 1,955.51.

Property led the charge, climbing 0.89% or 33.11 points to 3,720.17; holding firms went up 0.78% or 62.04 points to 7,942.91; industrials rose 0.45% or 50.88 points to 11,169.85; mining and oil increased 0.06% or 8.36 points to 12,738.35; and services inched up by 0.15 point to close the session at 1,694.66.

Losers narrowly edged out winners at 105 to 103, while 51 issues were unchanged.

Value turnover declined to P6.57 billion yesterday from Friday’s P7.48 billion as 3.38 billion shares changed hands.

Foreigners turned net buyers at P193.66 million, a reversal of the net P779.53 million shares dumped last Friday.

Regina Capital’s Mr. Limlingan said markets will be anticipating the meetings of two major central banks this week — the European Central Bank and the Bank of Japan — as well as data on US housing starts.

Most Southeast Asian stock markets rose on Monday, with Singapore hitting a near two-year high, as tame inflation and soft domestic demand in the United States hurt prospects for a third interest rate increase by the Federal Reserve.

A tamer Fed bodes well for inflows into Asia as investors usually look to its markets for better yields. — JCL with Reuters

RELATED ARTICLESMORE FROM AUTHOR