Local stocks advanced for a second straight day yesterday as strong first quarter corporate earnings results and better-than-expected agriculture output boosted market sentiment.

The benchmark Philippine Stock Exchange index (PSEi) closed at 6,658.59, up by 35.98 points or 0.54 percent, while the broader All Shares index gained 13.77 points or 0.39 percent to close at 3,546.10.

Total value turnover reached P4.6 billion. Market breadth was negative, 105 to 73, while 57 issues were unchanged.

Michael Ricafort , chief economist at Rizal Commercial Banking Corp., said the index traded higher due to the strong agricultural output data which could mean stronger economic growth figures set for release today.

The value of agriculture and fisheries production posted an annual growth of 2.1 percent in the first quarter, the Philippine Statistics Authority reported yesterday.

Meanwhile in Asia, stocks extended losses as traders awaited the release of US inflation data, with sentiment clouded by a range of issues including the debt ceiling standoff in Washington and banking sector uncertainty.

After last week's Federal Reserve interest rate hike and a forecast-beating jobs report, focus is lasered on the consumer price index reading later in the day, which will play a key decision-making role in the US central bank's June policy meeting.

The Fed hinted at a possible pause in its long-running tightening cycle but observers warned that any sign inflation is creeping up would put pressure on officials to turn the screws further.

And while the world's top economy continues to show resilience, several indicators suggest it is easing, feeding concerns that it could be heading for a recession.

'Even though investors continue to anticipate the best of both worlds with the medium-term trends around inflation and interest rates falling together, growth is also slowing,' said SPI Asset management's Stephen Innes.

'Central banks are still tightening policy, which limits the upside to risky assets.'

Adding to the headache for the Fed is the need to avoid causing more ructions in the finance sector after the recent upheaval that has seen three US regional lenders go under, one taken over by JPMorgan, and UBS buying Credit Suisse in the space of two months. - AFP


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