LOCAL stocks firmed up slightly Tuesday but investors remained jittery despite China’s fresh injection of liquidity into its battered financial markets while geopolitical tension in the Middle East continued to escalate.
The Philippine Stock Exchange index (PSEi) added 1.71 points or 0.03 percent to close at 6,835.13 in mixed trade as investors weighed the latest intervention in China.
“In our view, the bottomline is not more strong policy stimulus and the government will allow the market to play a more important role,” investment bank BofA Merrill Lynch said in a research note. “It helps promoting efficiency gains, but investors grew concerned about potential growth challenges and less policy support.”
Locally, inflation crept higher for a second straight month to 1.5 percent year-on-year in December from 1.1 percent in November. (See story on this page.)
“Going forward, modest inflation should continue to hold in 2016. Given that the increase in food prices in November had been typhoon related, it is unlikely to be persistent,” British bank Standard Chartered said in a research note.
“Rice inflation, the main driver of inflation in previous years, remains benign. At the same time, energy inflation is likely to remain low. We expect inflation to reach 2.2 percent in 2016, from 1.4 percent in 2015,” the bank said.
The PSEi’s modest gain was supported by holding firms and property firms, which slightly advanced, while other counters slipped.
Value turnover was still thin at P3.99 billion as many investors were still on vacation. Doris Dumlao-Abadilla