(UPDATE) Stocks close lower as investors stay on sidelines

MANILA, Philippines (Xinhua) - The Philippine stock market continued to trade sideways today in what analysts attribute to the "ghost month" effect.

The bellwether Philippine Stock Exchange index lost 0.04 percent, or 2.77 points, to 6,864.82, while the broader all-share index managed to keep its 0.05 percent, or 2.13 points, gain and settled at 4,112.56.

Trading volume reached 653.26 million shares worth 7.46 billion pesos (172.01 million US dollars) with 93 stocks advancing, 82 declining, and 51 were unchanged.

Except for the service sector, other counters managed to end higher.

"The market continue to trade sideways with the month-end season, although some fund managers might opt to unwind part of their portfolio holdings in time for the'ghost month'," 2TradeAsia.com said.

Analyst Justino Calaycay of Accord Capital Equities Corp. earlier said the Hungry Ghost Festival, which started on July 27 and is expected to end on August 24, is creating a stir in the local equities.

2TradeAsia.com said that some foreign fund managers have opted to stay at the sidelines, following the US Federal Reserve's latest tapering plan and lack of clear hints as to when interest rates will be adjusted.

Also, investors waited for the announcement of the local central bank's decision concerning the country's interest rates.

The Philippine central bank today increased key policy rates by 25 basis points to avert inflation risks.

Stocks in the 30-company index closed mixed. Among those sold down were heavyweight Philippine Long Distance Telephone Co., SM Investments Corp., and the Bank of Philippine Islands.