(UPDATE) Stocks close higher after Wall St rise

ABS-CBN News

Posted at Jun 06 2008 03:12 PM | Updated as of Jun 06 2008 11:12 PM


Stocks snapped four straight days of losses on Friday, closing up 0.8 percent, as investors took their cue from Wall Street's gains overnight and sought bargains.

But analysts said worries over surging inflation and higher interest rates were persistent as reflected by thin trading volume.

The composite index gained 21.28 points or 0.8 percent to 2,739.70.

The broader all-share index rose 14.10 points or 0.8 percent to 1,711.17.

Gainers outpaced losers, 55 to 31, while 57 stocks were unchanged.

Turnover was lower at P2.1 billion compared to Thursday's P2.6 billion.

"The market was just tracking Wall Street which was buoyed by recent positive economic news in the US," said Joseph Roxas, president of Eagle Equities.

"However, investors remained cautious after yesterday's high inflation data and the central bank's interest rate hike."

Late Thursday, the central bank raised its key interest rates by a quarter percentage point to curb inflation that hit a nine-year high of 9.6 percent in May.

The rate increase took the overnight borrowing rate to 5.25 percent and the overnight lending rate to 7.25 percent.

"High interest rates would mean higher cost of doing business for companies. This would impact their earnings," said Jonathan Ravelas, Banco de Oro strategist.

Market heavyweight Philippine Long Distance Telephone Co. jumped P10.00 or 0.4 percent to P2,520.00.

Rival Globe Telecom rose P10.00 or 0.8 percent to P1,280.00.

Ayala Corp., the country's biggest conglomerate, advanced P12.50 or 4.0 percent to P322.50.

Petron Corp. soared P0.50 or 9.1 percent to P6.00 after it confirmed that London-based Ashmore group would proceed with a tender offer to minority shareholders in line with rules of regulators.

The Securities and Exchange Commission mandates an investor acquiring at least 35 percent of a listed company to offer to buy out public shareholders at the price agreed on with the block seller.

Ashmore is set to buy a 40-percent stake in the country's biggest oil refiner.

Earlier, Petron's stock suffered heavy losses on news that Ashmore would dodge the mandatory tender offer.