Philippines shares closed at a three-and-a-half year high on Monday, helped by gains in telecom stocks as market sentiment turned positive with the main index sustaining a rally above the key 1,600 level.
Analysts said local players also bought second-line stocks that were the subject of speculative play like Pilipino Telephone Corp (Piltel) and Metro Pacific Corp.
The Philippine stock index added 5.58 points or 0.34 percent to 1,633.54 points, the highest closing level since February 2001.
"When the market broke resistance at 1,600, that signalled an uptrend for the medium term," said Raul Ruiz, head of research at DBP Daiwa Securities, adding the next resistance was pegged at 1,685.
Market players shrugged off news that inflation hit its highest level in more than three years, at 6.3 percent, in the year to August, due to rising food and fuel prices. The inflation rate was within the central bank's forecast of 6.0-6.6 percent.
Turnover fell to 556.7 million pesos ($9.9 million) from Friday's 747.06 million pesos. Losers and gainers were balanced at 31 issues each, with 50 issues unchanged.
Dominant telco Philippine Long Distance Telephone Co (PLDT) climbed 1.13 percent, or 15 pesos, to 1,340 pesos. Rival Globe Telecom gained 1.12 percent, or 10 pesos, to 900 pesos.
Analysts said telecom stocks still had plenty of upside, with huge demand for mobile phones which would support strong profit growth.
Property firm Metro Pacific climbed 11.11 percent, or 5 centavos, to 50 centavos as the market cheered a plan from its parent, Hong Kong's First Pacific Co Ltd, to raise Metro Pacific's stake in a firm that operates an elevated expressway in the capital.
Piltel, a PLDT subsidiary that will be acquired by sister firm Smart Communications Inc, gained 3.64 percent, or 10 centavos, to 2.85 pesos.
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