Stocks bounce back as May inflation below target

Market investors cheered the lower–than–expected inflation figure, sending the benchmark index back in positive territory, above the 7,600 mark.

The benchmark Philippine Stock Exchange index (PSEI) gained 106.15 points, or 1.40 percent, to finish at 7,685.76 while the broader All Shares index gained 49.11 points, or 1.06 percent, to finish at 4,664.29.

Most counters were up except for the property index which barely moved at 0.06 percent.

Total value turnover, however, remained thin at P5.414 billion but market breadth was positive, 112 to 84 while 53 issues were left unchanged.

The country’s annual headline inflation rose to 4.6 percent in May, the highest in five years and faster than the 4.5 percent in April and the 2.9 percent a year ago.

“The PSEi surged 106 points today to close at 7,685.76 as investors received May’s inflation figure of 4.6 percent with open arms. Inflation was lower than the Department of Finance’s consensus’ figure of 4.9 percent, and was at the lower end of the Bangko Sentral’s 4.6 percent to 5.4 percent target range,” said Gio Perez, a trader at Papa Securities.

Still, the index showed weakness and volume was relatively thin.

It gradually recovered from its low and was even bought up at the close.

“This is on top of the P673 million of net foreign selling for the day,” Perez said.

SM contributed the most to the PSEi’s late gain as it soared 3.8 percent on last minute buying.