WALL ST. UPSTICK BOOST SOME CONFIDENCE / GLOBAL STOCKS PLUNGE, P42.58=$1

MANILA, AUGUST 6, 2011 (MALAYA) Share prices ended a little bit higher yesterday as confidence got a boost from the overnight uptick in Wall Street and good second-quarter results of listed issues.

The Philippine Stock Exchange index (PSEi) rose 13.08 points to 4,501.53, a 0.29 percent hike.

The broader all shares index added 1.68 points to 3,104.11.

Gainers edged losers, 88 to 64, with 29 stocks unchanged.

Trading turnover reached P5.97 billion.

"Sentiments were aided by the overnight gains from the US stock market, which broke its eight-day losing streak. It was the longest streak for the Dow since October of 2008," said AB Capital Securities in an investors notes.

"Stocks here were also prodded higher by the report that the government reported a lower-than-expected fiscal deficit," the brokerage firm added.

AB Capital said it expects the market to move sideways for the rest of the week.

"After three volatile trading sessions, the local stock market is expected to move sideways in the coming sessions. The PSEi is initially having minor support at the 4,500 psychological level. However, the likelihood of it breaking the said support looks technically high," it said.

Brokerage firm Citiseconline.com recently forecast a 4,900 closing for the market for the year as it sees a shift of funds back to emerging markets like the Philippines for the rest of the year.

Citing a waning of market headwinds that dragged market performance in the first half, Citiseconline.com research head April Lee-Tan said portfolio flows are expected to reverse from developed economies to emerging economies like what happened in the second half of last year.

Tan said the resiliency of Philippine fundamentals will attract investors as developed economies struggle with their fiscal and credit woes.

Most actively traded Lepanto Consolidated Mining A was up P0.10 to P1.32 and B up P0.08 to P1.41.

Philippine Long Distance Telephone rose P2 to P2,400.

Energy Development eased P0.06 to P6.60.

Zeus Holdings gained P0.12 to P1.04.

Metropolitan Bank and Trust climbed P1.60 to P78.80.

Manila Mining rose P0.003 to P0.07.

Philex Mining advanced P0.10 to P25.55.

Oriental Peninsula Resources Group climbed P0.25 to P5.09.

Alliance Global was up P0.08 to P11.78.

FROM MANILA BULLETIN

Global stocks plunge; peso down by P0.34 By FIL C. SIONIL August 5, 2011, 6:36pm

MANILA, Philippines — The peso depreciated by an average of 34.2 centavos Friday with the stock market tumbling by 63.98 points to 4,435.5 despite a slight dip in inflation rate for the month of July to 5.1 percent as risk-averse “investors went to the sidelines” due to the uncertainty in the global economic outlook.

The domestic financial market took its cue from the offshore markets with almost all economies in the Asia-Pacific region, except for Vietnam; Europe; and the United States ending on the red, which analysts said was the worst sell-off since the financial crisis in 2009.

“Investors are holding on to their cash since the market condition remains very volatile despite the debt deal signed by US President (Barack) Obama mid this week. The situation is a bit hazy, thus the sell-off,” a banker from a foreign bank said.

At the start of the electronic currency trading, the peso opened weaker by 11.5 centavos to a quote of P42.45 and slid to an intra-day low of P42.75 due to the increase demand for dollars before closing at a rate of P42.58.

Total dollars that changed hands amounted to $1,037.00 with the peso losing value by 34.2 centavos based on the weighted average rate of P42.611 from P42.269 the previous day.

Jitters was also evident at the stock market with almost all of the blue chips ending on the red causing the Philippine Stock Index to dip by 1.42 percent.

Back in the local market, the domestic financial market will continue to be volatile as the demand for the greens increase with the stock market remaining cautious. “Despite the uncertainty in the US market, dollar is still the preferred currency by most,” a currency trader said.

Fears of global turmoil

Fears of global meltdown following the failure of both Europe and the United States to fix deepening economic problems set off stocks fall in the Asia-Pacific region.

This followed the sharp sell-off that had battered the US and European markets the previous day as investors fear about European debt levels and US growth prospects intensified, the New York Times reported.

The rout extended across the region, with falls of more than 3.3 percent in Japan, South Korea and Singapore and more than 4 percent in Hong Kong, Australia, Taiwan and Indonesia.

The main market index in mainland China was 1.8 percent lower by late morning, and the market in New Zealand slumped 2.8 percent.

Investors continued to pull funds away from stocks around the globe, including from emerging markets with their solidly growing economies, and piled instead into the perceived safety of assets such as US Treasury bonds, which some had been avoiding during the debate over the nation’s debt ceiling.

Wall Street saw the worst day in more than two years, with the Dow Jones industrial average ending down 4.3 percent, and the broader Standard & Poor’s 500 finishing 4.8 percent lower – making for a decline on that index of more than 10 percent since July 22.

Elsewhere in the region, the Australian central bank underlined the general unease by lowering its economic growth forecast for this year. Although ravenous demand from China will continue to buoy Australia’s commodities sector, the bank cited the sovereign debt problems in other parts of the world as a risk.

“There remains a probability that the fiscal problems in some advanced economies could play out in a disruptive way over the next year or so, which would have flow-on effects to global financial markets and economic activity,” the bank said in its quarterly monetary policy statement.


Chief News Editor: Sol Jose Vanzi

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