Index rises to 6,100 level as inflation eases in Oct.

THE MAIN INDEX climbed to the 6,100 level on Tuesday as inflation slowed in October, boosting bets that the Bangko Sentral ng Pilipinas (BSP) will not hike rates again at its policy meeting next week.

The benchmark Philippine Stock Exchange index (PSEi) went up by 53.29 points or 0.87% to close at 6,131.32 on Tuesday, while the broader all shares index rose by 18.19 points or 0.55% to end at 3,310.34.

“Philippine shares continued eke out gains as investors remained positive with the latest inflation print,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

The bellwether index rose further “as investors cheered the surprisingly low Philippine October inflation print,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet likewise said in a Viber message on Tuesday.

“This reinforced growing expectations that the BSP will not hike its policy rate this month and perhaps the rest of the year,” Mr. Colet added.

“Nonetheless, daily value turnover was relatively low as some market participants opted to stay on the sidelines ahead of the release of third quarter GDP (gross domestic product) data on Thursday,” he said.

Value turnover went down to PHP 2.99 billion on Tuesday with 240.17 million shares changing hands from the PHP 4.02 billion with 323.74 million issues seen on Monday.

Headline inflation eased to 4.9% in October from 6.1% in September and 7.7% in the same month last year, preliminary data from the Philippine Statistics Authority released on Tuesday showed.

This was lower than the 5.7% median estimate in a BusinessWorld poll last week and the BSP’s 5.1-5.9% forecast for the month.

For the first 10 months, inflation averaged 6.4%, above the central bank’s 5.8% forecast and 2-4% target for the year.

A BusinessWorld poll of 17 economists and analysts last week yielded a median estimate of 4.9% for third quarter GDP growth, faster than the preliminary 4.3% expansion seen in the second quarter.

If realized, this would bring the nine-month GDP growth average to 5.2%, still below the government’s 6-7% full-year target.

All sectoral indices closed higher on Tuesday. Financials climbed by 40.91 points or 2.37% to 1,762.62; industrials rose by 93.97 points or 1.1% to 8,589.75; services went up by 5.17 points or 0.34% to 1,495.83; holding firms increased by 12.09 points or 0.2% to 5,866; mining and oil added 2.60 points or 0.02% to end at 9,896.87; and property inched up by 0.40 point or 0.01% to 2,590.71.

Advancers outnumbered decliners, 89 versus 80, while 48 shares closed unchanged.

Net foreign buying stood at PHP 52.11 million on Tuesday versus the PHP 172.65 million in net selling recorded on Monday. — S.J. Talavera