Stocks lose steam on high prices data

08/06/2008

The stock index closed little changed yesterday after a higher-than-expected inflation report curbed gains, dealers said.

The Philippine Stock Exchange composite index added 2.39 points, or 0.1 percent, to 2,602.38. The all-share index inched up 7.64 points to 1,640.44.

Volume reached 3.5 billion shares worth P2.5 billion. There were 60 advancers and 38 decliners while 55 shares were unchanged.

“Investors lent more weight to the drop in oil prices, but that is not to say that the latest inflation data was completely ignored,” DBP Daiwa Securities research head Ron Rodrigo told Dow Jones Newswires.

The National Statistics Office said the inflation rate hit 12.2 percent in July, the highest in 17 years as prices of basic commodities increased.

July’s rate was above the 11.2 percent to 12 percent forecast of the Central Bank and was the highest since December 1991 when the rate topped 13.2 percent, it said.

Shares of Philippine Long Distance Telephone Co. shed 0.2 percent at 2,525. A shares of San Miguel Corp. closed unchanged at 43.50 while B shares shed 1.1 percent at 43.50.

Declining prices of oil, meanwhile, enabled the peso to strengthen against the US dollar when it closed at 44.12 per dollar from a finish of 44.42 on Monday.

The local currency opened weaker at 44.30 per dollar against the previous day’s 44.28.

It was traded between 44.45 and 44.09 making the day’s average at 44.18.

Volume of trade surged to $894.25 million from day-ago’s $621.5 million.

Traders expect the oil-dependent unit to improve this week as prices of oil in the world market get better.

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