Philippine market breaches 4,400 level

MANILA, Philippines—Most local stocks climbed on Tuesday, allowing the main index to breach the 4,400 mark, as regional markets took heart from the better-than-expected purchasing managers index (PMI) that recently came out of the beleaguered eurozone.

The main-share Philippine Stock Exchange index added 25.14 points, or 0.57 percent, to finish at 4,422.22, ending in the green for the third straight session.

All counters closed in positive territory but the mining/oil and financial counters benefited the most from the upswing, respectively rising by 2.23 percent and 1.1 percent.

Value turnover at the local bourse was back to normal at about P4.87 billion. There were 99 advancers that edged out 69 decliners while 41 stocks were unchanged.

The index was led higher by PLDT, AGI, Philex, Ayala Corp., Metrobank, DMCI, EDC, BDO, SMC and Meralco. Digitel, Lepanto A (open only to local investors) and B (open to all), Security Bank, Seacem, NiHao and PNB also traded higher in heavy volume.

On the other hand, ALI and Semirara succumbed to profit-taking.

This developed as equity markets in Europe began the year in positive mood, with gains led by the German DAX index following the release of firmer than expected readings for eurozone PMI, according to investment bank Credit Agricole CIB.

PMI, considered as a leading indicator of the health of the manufacturing sector, is based on data on new orders, inventory levels, production, supplier deliveries and the employment environment.

But Credit Agricole CIB noted that the PMI data remained at a weak level contracting for a fifth month in a row, which was still consistent with eurozone recession.

“It seems unlikely that equity gains will be sustained over the rest of this week, with risk aversion set to remain elevated against the background of ongoing eurozone debt and global growth concerns. Indeed, both French and German leaders in their New Year messages warned about the risks ahead, with a meeting between Germany’s Merkel and France’s Sarkozy scheduled for January 9th ahead of an EU Finance Ministers summit on January 23rd,” the investment bank said.

Press reports that Germany has been pushing for an even bigger write-down of Greek debt than previously agreed would only add to risk aversion over the short term, it added.