Market rises on sustained GDP growth

STOCKS rose for a third day after the Philippine Statistics Authority reported that the gross domestic product expanded 6.4 percent in the first quarter within the government’s target.

The PSE index, the 30-company bellweather of the Philippine Stock Exchange, gained 16 points, or 0.25 percent, to close at 6,675.46 as four of the six subsectors advanced, led by property.

The index representing all shares also picked up 5 points, or 0.15 percent, to settle at 3,551.48, on a value turnover of P6.24 billion. Losers outnumbered gainers, 98 to 66, while 62 issues were unchanged.

Seven of the 10 most active stocks ended in the green, led by Bloomberry Resorts Corp. which climbed 3.27 percent to P11.36 and SM Prime Holdings Inc. which went up 1.76 percent to P34.60.

The peso, however, retreated to 55.75 against the US dollar Thursday from 55.67 on Wednesday on reports of widening trade deficit.

Asian markets mostly fell Thursday as investors shrugged at data showing US inflation dipped further but only marginally, suggesting the Federal Reserve still had much to do in its battle against rising prices.

Adding to the uncertainty was the battle to raise the US debt ceiling to avert a destabilizing default, with Democrats and Republicans unable to reach a deal just weeks before the country runs out of cash to pay its bills.

The consumer price index reading was the lowest in two years and a tad below what was expected, giving the Fed a little room to take a break in its long-running rate hike campaign.

However, the figure came after a stronger-than-expected print Friday on jobs creation that showed the world’s top economy remained strong, while observers said further evidence was needed to show that the tightening was bearing fruit.

The 4.9 percent rise in April was far above the Fed’s stated goal of two percent, which some analysts said meant it was unlikely officials would consider cutting rates at the end of the year, as some investors had been betting on.

“The Fed’s policy is working -- inflation is coming down, but inflation is

Standard still too high,” Valentine Ainouz, at the Amundi Institute, told Bloomberg Television.

“I expect the Fed to maintain rates higher for longer than the market expects.”

And Priya Misra at TD Securities added: “We need more CPI prints to clarify that inflation is definitely declining.